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Airlines hit economic turbulence | Airlines hit economic turbulence |
(about 5 hours later) | |
US Airways and Air France-KLM have both suffered sharp share falls due to the current economic slowdown. | |
American airline US Airways saw its shares fall 15.4% after it unveiled losses of $865m (£537m) for the third quarter of the year. | |
Meanwhile, European airline Air France-KLM's shares closed at their lowest level in over three years, down 12.3% at 11.87 euros. | |
It predicted zero growth for 2009 and 2010 and said traffic would fall. | It predicted zero growth for 2009 and 2010 and said traffic would fall. |
US Airways' losses included a $488m (£301m) loss from its fuel hedging program that was meant to protect it against higher oil prices by pre-paying for fuel at a set price. | |
But since the airline purchased the jet fuel, the price of oil has steadily fallen, meaning the carrier has been paying more than the average price rather than less. | |
In contrast, in the third quarter of 2007, US Airways made a profit of $177m. | |
Bleak forecast | Bleak forecast |
Air France-KLM shares also plunged to their lowest level since July 2005 as passenger numbers in its core European market fell 2.5% last month, the steepest one-month drop in passenger numbers since October 2007. | Air France-KLM shares also plunged to their lowest level since July 2005 as passenger numbers in its core European market fell 2.5% last month, the steepest one-month drop in passenger numbers since October 2007. |
The drop in travellers overshadowed gains on the company's routes to the Americas and Asia-Pacific regions. | The drop in travellers overshadowed gains on the company's routes to the Americas and Asia-Pacific regions. |
The company said it expected no growth in capacity for two years, a major shift from its prediction last August of a 2% increase in capacity for winter 2008 and summer 2009. | The company said it expected no growth in capacity for two years, a major shift from its prediction last August of a 2% increase in capacity for winter 2008 and summer 2009. |
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