European airlines grapple with bleak 2009
operating profit and Ireland's Aer Lingus gave up any chance of a pretax profit as airlines brace for a sharp slowdown in air travel.
Lufthansa, which vies with Air France-KLM to be Europe's biggest airline, posted a 64 percent drop in 2008 net profit to 599 million euros ($764 million), undershooting analyst estimates. It warned 2009 operating profit would fall.
Airlines are struggling to remain profitable as businesses and consumers trim travel budgets amid the global economic crisis. The world's airlines lost up to $8 billion in 2008, the International Air Transport Association said last week.
"Given that statements on the duration and extent of the worldwide recession are becoming more and more negative, we continue to see above-average operating risks in 2009," said DZ Bank analyst Robert Czerwensky.
The worsening climate prompted Air France-KLM to bow to recent investor pressure to be more aggressive about cutting capacity, pushing its shares up more than 5 percent.
Announcing its summer schedule, it said it would offer 3.4 percent fewer seat-kilometres — a measure of capacity adjusted for the distance flown — this year compared with a previous planned cut of 2 percent that some analysts had called modest.
The Franco-Dutch group's planners argue that its powerful Paris-Amstedam hub means it is getting a bigger benefit from its network reductions than the headline capacity figures suggest.
In Asia, Hong Kong's Cathay Pacific posted a record $1 billion second-half net loss on Wednesday and warned the year ahead will be "extremely challenging". [ID:nHKG191403]
Lufthansa said hopes for improved earnings in 2010 hinged on whether the market started recovering at the end of the third quarter of this year.
