Air France-KLM is forecasting an operating loss of €200 million ($270 million) for the full fiscal year, which ends on 31 March.
Chief executive Pierre-Henri Gourgeon has updated the airline's financial situation following a board meeting today.
He says the carrier is suffering from the economic crisis, with a "significant deterioration" in passenger and freight unit revenues.
Gourgeon adds that the airline's hedging position means it has not been able to benefit fully from the drop in fuel prices.
The company is also having to absorb a €200 million impact from its monthly fuel bills' being based on the previous month's prices.
Air France-KLM's financial year 2009-10 will "begin in a context of unprecedented difficulty", says Gourgeon, with "little visibility" on the economy and fuel prices.
Revenues will fall by around 6%, he says, but fuel expenditure should be about 20% lower owing to a reduction in the hedged volume, from over 90% to 43%.
"This drop, combined with our other cost-saving measures, should allow us to offset a significant part of the decline in revenues and to limit our operating loss," he says.
Gourgeon adds that the airline's business model has "demonstrated its efficiency for several months" and the company has a "comfortable" cash position of €3.5-4 billion.
Source: Air Transport Intelligence news
