May 4, 2018 / 5:19 AM / 2 months ago

Air France-KLM reins in profit and growth expectations amidst strikes

BERLIN/PARIS, May 4 (Reuters) - Air France-KLM said it expected profits to fall this year due to the effect of strikes at its main French unit, which are forcing it to rein in growth and mean it can not take advantage of a generally benign backdrop for airlines.

The group said on Friday - as staff staged a 13th day of strikes - that its first quarter loss widened to 118 million euros ($141.4 million), against a restated loss of 33 million euros a year ago.

Overall unit costs in the quarter rose 2.1 percent, of which 1.7 percent was related to the strikes.

Air France-KLM said adjusted unit costs would now rise this year by up to 1 percent, against previous expectations for a drop of 1-1.5 percent. Capacity growth would also now come in at 2.5-3.5 percent, versus previous plans for 3-4 percent growth.

“What I regret is that the year started well in commercial terms, demand was there,” Chief Financial Officer Frederic Gagey told journalists.

$1 = 0.8344 euros Reporting by Victoria Bryan and Cyril Altmeyer; Editing by Sudip Kar-Gupta

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