Air France-KLM Deepens Capacity Cut

Air France-KLM extended planned capacity cuts on Wednesday, pushing up its share price, as the economic downturn hurts demand for flying.

The Franco-Dutch airline group said it would cut seating capacity on its summer 2009 flight schedule by an average 3.4 percent on both its long-haul and medium-haul routes, up from a previous planned reduction of 2 percent.

The summer schedule runs from March 29 until October 25.

Air France-KLM said last month it would cut both its summer and winter schedules by an average of 2 percent.

Air France-KLM shares rose more than 5 percent to 7.14 euros.

The changes particularly affect routes to North America and Asia as well as domestic routes where Air France also faces rising competition from high-speed trains, the carrier said.

"The Air France-KLM group's summer 2009 schedule has been adjusted in line with the sharp decline in demand caused by the unprecedented global economic crisis which is affecting all corners of the world," it said in a statement.

Air France-KLM will start operating a key transatlantic joint-venture with Skyteam partner Delta Air Lines in April, exposing its brand to the North American market.

Following a merger last year, now includes Northwest Airlines which had a longstanding similar venture with Dutch carrier KLM, which merged with Air France in 2004.

Delta said on Tuesday it would cut its international capacity by an additional 10 percent from September as the global economic downturn batters the industry.