March 16, 2020 / 8:47 AM / 25 days ago

Air France KLM to park biggest jets, slash service as virus hits travel

FILE PHOTO: Logo of Air France KLM Group is pictured on the first Air France airliner's Airbus A350 during a ceremony at the aircraft builder's headquarters of Airbus in Colomiers near Toulouse, France, September 27, 2019. REUTERS/Regis Duvignau

PARIS (Reuters) - Air France KLM (AIRF.PA) will park its biggest airliners and slash service by up to 90% over the next few days in response to the impact of the coronavirus, it said on Monday, sending its shares down 16% in early trade.

It said it had identified measures to save 200 million euros (180.65 million pounds) in 2020 and ways to cut its capital expenditure by 350 million euros.

“The deterioration of the environment linked to the epidemic and the sharp reduction in its activity ... lead the group to forecast a sharply deteriorated financial trajectory,” it said in a statement.

The company said it welcomed recent expressions of support from governments in France and the Netherlands.

Air France KLM said it would cut back flights over the next few days, with the number of available seat kilometres (ASK) potentially falling by 70%-90%.

It will ground Air France’s fleet of Airbus (AIR.PA) 380s and KLM’s Boeing (BA.N) 747 fleet.

The group has more than 6 billion euros in cash and cash equivalents, it said, after both airlines drew on two revolving credit facilities last week.

Reporting by Sudip Kar-Gupta and Sarah White, editing by Louise Heavens and Jason Neely

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