Air France-KLM retreats as worries mount on pace of rebound
Air France-KLM left investors guessing about the strength of its recovery, abstaining from a full-year profit forecast and trimming its capacity prediction as French air-traffic control strikes and engine shortages inject uncertainty into the outlook. Shares in the Franco-Dutch group fell as much as 6.3% , slipping to their lowest level in more than three months, as its muted assessment contrasted with a raised 2023 forecast from British Airways owner IAG SA. Air France-KLM pared its capacity forecast to about 95% of 2019 levels, after previously saying it would reach as high as 100%. Beyond the strikes and engine shortages, a lack of available workers also is holding back the recovery. The company, which relied on billions of state aid to survive the pandemic, said it would restore its equity first before resuming a dividend payout and reaffirmed its longer-term margin guidance. “The main reason to explain today’s drop is the forecast downgrade for the group’s full-year capacity,” said Alphavalue analyst Yi Zhong. Air-traffic controller strikes in France will also continue disrupting operations, notably at Orly airport in Paris, exposing Air France to the risk of higher costs, revenue gaps and management distractions during the busy summer months. “It takes an enormous amount of effort from our operational teams to mitigate those losses,” CEO Ben Smith said on a call with analysts. “We expect those to continue in the near term. Our understanding is that it will continue one to two days a week for the foreseeable future.” The financial hit from the walkouts is below E20m so far, Smith said.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2023-05-08/oneworld/air-france-klm-retreats-as-worries-mount-on-pace-of-rebound
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Air France-KLM retreats as worries mount on pace of rebound
Air France-KLM left investors guessing about the strength of its recovery, abstaining from a full-year profit forecast and trimming its capacity prediction as French air-traffic control strikes and engine shortages inject uncertainty into the outlook. Shares in the Franco-Dutch group fell as much as 6.3% , slipping to their lowest level in more than three months, as its muted assessment contrasted with a raised 2023 forecast from British Airways owner IAG SA. Air France-KLM pared its capacity forecast to about 95% of 2019 levels, after previously saying it would reach as high as 100%. Beyond the strikes and engine shortages, a lack of available workers also is holding back the recovery. The company, which relied on billions of state aid to survive the pandemic, said it would restore its equity first before resuming a dividend payout and reaffirmed its longer-term margin guidance. “The main reason to explain today’s drop is the forecast downgrade for the group’s full-year capacity,” said Alphavalue analyst Yi Zhong. Air-traffic controller strikes in France will also continue disrupting operations, notably at Orly airport in Paris, exposing Air France to the risk of higher costs, revenue gaps and management distractions during the busy summer months. “It takes an enormous amount of effort from our operational teams to mitigate those losses,” CEO Ben Smith said on a call with analysts. “We expect those to continue in the near term. Our understanding is that it will continue one to two days a week for the foreseeable future.” The financial hit from the walkouts is below E20m so far, Smith said.<br/>
