AIR
France-KLM Group
said the succession of terrorist attacks that have spanned Paris to the Riviera
are affecting its markets as fares fall and France's standing as a tourist
hotspot is undermined.
Europe's
largest airline said earlier this week that there is "special concern
about France as a destination" amid the Islamic State-inspired killings.
Fuel savings that lifted second-quarter operating profit 77 per cent will also
be "more than offset" over the year as a fare drop prompted by
overcapacity clips revenue, Bloomberg reported.
Demand
for travel from countries including Japan and China is ebbing away, and
sluggish growth in markets such as Brazil is also hurting passenger numbers,
while Britain's vote to quit the European Union may prove a further drag.
"If
the question is, do we see a deteriorating environment, the answer is
yes," chief financial officer Pierre-Francois Riolacci said.
"As
the months have gone by we've seen a significant drop in demand for inbound
travel to Europe, especially France. This pressure is happening in the context
of capacity growth that is very high for the summer season," he said.
Second-quarter
operating income increased to EUR317 million (US$348 million) from EUR179
million a year earlier as the Franco-Dutch group's fuel bill shrank by 30 per
cent. At the same time, the fare slide led sales to slip 5.2 per cent to
EUR6.22 billion, and a four-day pilot strike timed to disrupt the Euro 2016
soccer championships wiped EUR40 million from earnings.
Source
: HKSG.
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