'Persistently weak cargo demand' for Air France-KLM
Air France-KLM has slashed its earnings forecast for 2014, having been hit by over-capacity in traditionally lucrative long-haul routes and weak cargo demand.
Air France-KLM’s cargo traffic decreased by 4.3 percent in June compared to the same month last year.
“While not representing a turning point in market trends, the June traffic figures published today as well as bookings for July and August nevertheless reflect the overcapacity on certain long-haul routes, notably North America and Asia, with the attendant impact on yields,” the company said in its report.
“This comes on top of the persistently weak cargo demand and the challenging situation in Venezuela identified in the first quarter.”
The airline, Europe's second biggest airline after Lufthansa, said due to these factors, it is revising its full-year EBITDA target from $3.4 billion to $2.9-3.1 billion.
There was also a 9.4 percent reduction in full freighter capacity.
Cargo traffic fell for Air France-KLM in every region, with Asia-Pacific at the highest (5.4 percent) and Caribbean/India Ocean at the lowest (1.7 percent). Americas decreased by 3.4 percent, and Africa/Middle East by 4.3 percent.