Air France-KLM restructuring to continue as 3Q earnings fall sharply

Air France-KLM plans to expedite and intensify restructuring efforts as the group, Europe's second-largest airline by revenue, struggles under its debt burden and misses earnings targets. The group, the worst performing of Europe's big three network carriers, reported a steep slide in profitability in the seasonally-strong fiscal second quarter (three months to 30-Sep-2011), as passenger numbers and revenue growth failed to keep up with cost gains.

As expected, Air France-KLM's disappointing second quarter result was accompanied by a downbeat outlook for the remainder of the year, with an operating loss expected in the current fiscal third quarter and for calendar 2011.