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Air France Cuts Routes And Capacity

Sat Nov 17, 2001 3:43 am

Air France follows rivals and cuts capacity
By Mark Odell
Published: November 16 2001 12:54 | Last Updated: November 16 2001 14:41

Air France, the French national airline, on Friday said it had sharply cut capacity on its North American and Middle Eastern routes.

The airline has taken out 16 per cent of the seats on the North Atlantic and 8 per cent to the Middle East compared with last year's winter schedule, which runs from late October to the end of March, in response to the sharp fall-off in demand.

The French carrier said several weeks ago it planned to leave capacity unchanged, unlike its rivals which have all been cutting back sharply.

The airline has also cut the number of seats on European routes by 3.5 per cent and its domestic capacity by 6 per cent.

The sharp cuts in the regions worst hit by the fall-off in demand were balanced out by a 42 per cent rise in capacity on Air France's African network and a 9 per cent increase to the Caribbean.

Air France and Germany's Lufthansa are the only two leading airlines in Europe and the US not to have cut any jobs since the September 11 attacks greatly exacerbated the effects of the economic slowdown on the industry and plunged it into crisis.

The Paris-based airline had originally planned to increase winter capacity year-on-year by 7 per cent overall. The freeze on expansion has meant it will have to ground, sell or terminate the leases on 19 aircraft by the end of March. It has also deferred the delivery of a new Boeing 777 by 10 months.

Last week, the French carrier warned its second-quarter profits to the end of September, which it will release at the end of the month, would be "sharply lower".

Air France shares were down E0.16 to E15.70 in early afternoon trading in Paris.

There was some sign of encouragement for Europe's embattled airlines earlier this week, with signs of improving traffic data.

The Association of European Airlines said traffic in the week beginning 29 October was down 16 per cent year-on-year, a five point improvement on the previous three weeks.

The strongest recovery was in Europe where the fall-off in traffic more than halved to less than 7 per cent compared to a 15 per cent drop a week earlier. North Atlantic and Asia-Pacific demand recovered by roughly four percentage points but was still down by 30 per cent and 19 per cent, respectively.

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