Air France-KLM to cut spending, hike profitability
PARIS - The Franco-Dutch airline Air France-KLM said on Monday that it would pursue additional savings to become one of the most profitable European carriers by 2015.
Just five months after cutting its investment plans, the company unveiled new measures to save an additional 500 million euros ($650 million) over the next two years.
The airline group plans to cut overall investment next year to 1.2 billion euros from an initial forecast of 1.5 billion, and to 1.4 billion in 2014, instead of 1.6 billion, boss Jean-Cyril Spinetta said during a presentation to investors.
The savings are to be made primarily by purchasing fewer new aircraft, with spending on them limited to 400 million euros in each of the coming two years, roughly one-third the amount that Air France-KLM spent in 2011.
An effort is planned however to renovate airplane interiors, especially in First Class and Business Class, noted Olivier Fainsilber, a sector analyst at Oliver Wyman in Paris.
"Investing in the front-end classes is important to remain a leader in a global market that has become more and more demanding in terms of comfort and onboard services," he noted.
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