Europe's biggest airline, Air France-KLM, today announced a plan to cut costs by up to euro 1.2 bn ($ 1.53 bn) over the next five years as it warned it would miss its earnings forecast.
"Work is underway on a new cost-saving plan, the first estimates of which call for cumulative cost savings of an additional euro 700-800 mn by 2011-2012, and euro 1.1-1.2 bn by 2013-14," a statement said.
"The group will also review its investment programme to adapt to the decline in capacity and protect its balance sheet," it said.
The planned savings were announced as the group confirmed that it would limit increases in seat capacity to under two percent this year because of the financial crisis.
French press reports said Air France staff numbers could fall three per cent by 2011.
"Taking into account current economic conditions, it will be very difficult for the group to achieve its objective of operating income for this financial year of one euro 1 bn," the firm said in a separate statement.
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"Nevertheless, the operating result will remain comfortably in profit as long as market conditions do not deteriorate any further," it added.
Air France's share price fell by 8.9% in morning trading on the Paris exchange.