Air France-KLM shares drop on disappointing summer bookings

Bloomberg

Air France-KLM shares dropped the most in six months after the Franco-Dutch carrier said last-minute demand in the crucial summer season has been disappointing.
“Close-in bookings in the peak travel period are weaker than foreseen in view of softening macro-economic environment,” the Paris-based airline said in a statement on its August figures
on Monday.
The shares fell as much as 9.6 percent, the steepest decline since February 27, after the carrier added seats faster than demand grew, leading to a drop in occupancy levels even as passenger numbers edged higher.
The stock traded 8.3 percent lower at 9:07 euros as of 11:01 am in Paris.
The latest numbers suggest any turnaround at Air France-KLM may be fragile amid a bleaker outlook for economic growth in Europe.
The carrier published improved second-quarter earnings in July after a string of labor agreements paved the way for expansion of low-cost services.
Chief Executive Officer Ben Smith also gave the go-ahead on a long-awaited fleet renewal programme.
Sanford C Bernstein analyst Daniel Roeska said in a note that the figures suggest corporate bookings are weakening, since they tend to come closer to the point of travel than leisure sales, providing further evidence that the European market is headed for a cyclical dip.
Investors in airline stocks were also shaken on Monday by the start of a two-day strike at the British Airways unit of IAG SA, whose shares were trading 2.1 percent lower in London.