AIR FRANCE-KLM yesterday warned that a soaring fuel bill would hit profits this year after it swung to a loss in 2011 and scrapped its dividend.
The Franco-Dutch airline posted an operating loss of €353m (£296m) for 2011, compared with a profit of €28m in the previous year, reflecting a €904m hike in its fuel bill, it said.
With fuel costs expected to increase by €1.1bn in 2012, Air France-KLM said operating profit in the first half of the year would be below the level seen this time last year.
“The economic outlook remains uncertain while the fuel price remains at a record level in euros,” the company said.
But results in the second half of 2012 should benefit from the first effects of its three-year turnaround plan, it added, without giving a specific forecast.
Davy analyst Joshua Goldman said: “The company delivered results below our expectations and below consensus… Overall, the company has set an ambitious plan. In our view, it will be challenging to implement the full plan.”