=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2004/05/18/f= inancial1046EDT0080.DTL --------------------------------------------------------------------- Tuesday, May 18, 2004 (AP) Air France profit rises after tough year (05-18) 07:46 PDT PARIS (AP) -- Air France posted a profit for the first three months of 2004, ending a "difficult" fiscal year marked by the SARS virus in Asia and costly strikes back home. Air France said Tuesday it earned 13 million euros ($16 million) for the three months ended March 31 in contrast to a loss of 103 million euros a year ago. Revenue increased 0.4 percent to 3.01 billion euros ($3.62 billion). The earnings figures are the last to be published by Air France independently of KLM Royal Dutch Airlines, after the two carriers merged earlier this month to create the world's largest airline group by sales. For the full fiscal year, Air France said income fell almost a quarter to 93 million euros ($112 million) from 120 million euros the previous year. Revenue fell 2.8 percent to 12.34 billion euros ($14.83 billion). Air France chairman Jean-Cyril Spinetta said the period had been "overshadowed by a difficult economic climate compounded by the SARS crisis in Asia at the start of the year and severe air traffic control disruption." Hundreds of Air France flights were grounded in a series of strikes at Paris airports in June 2003 and February 2004. The strength of the euro against the dollar and other currencies trimmed= 4 percent off revenue, Air France said, but also helped offset the rising price of oil, sold in dollars. The company's spending on aviation fuel fell 5 percent, which combined with cost cuts elsewhere to produce a 2.6 percent drop in operating expenses. The retirement of Concorde alone cut the maintenance bill by a fifth. The iconic but loss-making supersonic plane was retired from service by British Airways and Air France last year after a career spanning three decades. Spinetta said Air France would press on with the cost-cutting program announced April 1, which aims to generate 600 million euros ($721 million) in savings by 2006. KLM is pursuing its own three-year program of cuts that has already produced savings of 200 million euros ($240 million), Air France said. KLM returned to profit in 2003-2004, it announced on May 6, with full-ye= ar net income of 24 million euros ($29 million), compared with a loss of 416 million euros a year earlier. Air France chief operating officer Pierre-Henri Gourgeon said the merged carriers were aiming for "significant growth" in their 250 million euros ($301 million) combined operating profit in 2003-2004, "based on the assumption that the oil price is $33 per barrel." Oil prices are currently much higher, with benchmark Brent crude trading at over $40 a barrel. ---------------------------------------------------------------------- Copyright 2004 AP