PARIS (AP) — Weak demand in a poor economy and stiff competition pushed Air France-KLM's net profit down more than 50 percent in the third quarter, the Franco-Dutch airline said Thursday.
The company is in the midst of a three-year turnaround plan that it hopes will make it more competitive by paying down debt and reducing staff costs. It initially said it would cut 5,000 jobs, but announced last month that it would need to eliminate 2,800 more to stay on track.
Like many airlines, the company, which posted a billion-euro loss last year, is struggling as a weak economy in Europe has hurt demand for medium-haul flights and cargo hauling. Net profit for the July-to-September period was 144 million euros ($198 million), down 51 percent. That's below the average of 164 million euros expected analysts surveyed by FactSet. Following a good summer season, however, revenues rose about half a percent to 7.2 billion euros.
In morning trading in Paris, the company's share price fell 1 percent amid investor concerns about the carrier's ability to turn its business around. The carrier originally said it would stem losses by the end of 2013 but has since said that won't happen. On Thursday, it said its medium-haul and cargo operations won't break even before at least 2015.
In addition to a poor economy, Air France is struggling to compete with low cost operators and plans to offer fewer flights between Paris and provincial cities itself, while increasing flights on its own low cost carrier, Transavia.