Air France-KLM Warns of 2011 Operating Loss

Air France-KLM announced Wednesday it would not be able to meet its targets and expects to post a loss this year, with the turbulent market forcing it to plan further cost-cutting measures.

The difficult economic climate is being exacerbated by volatile currency movements and high fuel prices.

"In these conditions, the group anticipates a negative operating result for the quarter October-December 2011 and, consequently, for the calendar year 2011," the airline said in a statement.

It noted that for its operating year, which from April, it still expects to generate a positive operating result.

Over the April to September period it posted a loss of 183 million euros ($248 million) and the company said it expected to record another loss in the current quarter.

Chief executive Jean-Cyril Spinetta said the results showed the airline needed to go further and would focus on cost-cutting to restore competitiveness, restructuring its short- and medium-haul flight activity and rapidly reduce its debt.

The company's management will present an action plan to address these in the first quarter of 2012.

"I am confident that both Air France and KLM will be able to deliver an effective response to these new challenges," Spinetta said in a statement.