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Air France-KLM shares savaged on profit downgrade, British Airways, Iberia hit - share wrap

Air France Chairman, Jean Ciril Spinetta
Air France Chairman, Jean Ciril Spinetta
  • Air France-KLM shares sold-off on concerns about yields as European economy slows.

Air France-KLM shares plunged 9.5% on 20-Jan-09 as investors punished the airline for its disclosure that it would post a third-quarter operating loss, raising concerns about the outlook. The carrier stated, "the deterioration in the economic environment during the third quarter has led to a slight weakening in passenger unit revenues and a strong decline in cargo revenue".

Air France-KLM still expects to achieve an operating profit for the year ending 31-Mar-09, but the level would depend on the economic situation in coming weeks. Investors are clearly unhappy with the opaque outlook.

The profit warning had some collateral damage, with British Airways dropping 7.7%, Iberia (-6.8%) and Air Berlin (-6.6%).

European selected airlines daily share price movements (% change): 20-Jan-09

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