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Air France-KLM SA reported profit above expectations on Thursday but warned that it would reduce its investment plan by €300 million during the year ahead as the company battles weakness in Europe.

The airline company stated net income of €316 million, or €1.07 a share, in the three months ended December compared to a loss of €1.18 billion, or €3.97 a share, in the fourth quarter of 2013, when results were dented by a significant tax-impairment charge.

Air France-KLM said the fourteen-day pilot strike, the longest in the companys history, weighed on its operating result by €425 million, of which €95 million were booked in the fourth quarter.

Earnings before interest, taxes and amortization stood at €316 million, a 17% drop compared to the €382 million stated a year ago. Excluding the impact of the strike, EBITDA were €411 million, the company said.

Air France-KLM reported quarterly revenue of €6.21 billion versus €6.12 billion in the previous year. Unlike in previous quarters the company benefited from favorable exchange rates, mainly due to the strengthening of the dollar against the euro. However, on like-for-like basis revenue was down 0.5%

The company also announced its would scaled back its investments plan by €600 million, half in the year ahead and half in 2016.

Additionally, Air France-KLM is boosting its cost cut target from “between 1% and 1.5% per year” to “an average of 1.5% per year” for the 2015-2017 period, while also parting ways with an additional 800 employees on voluntary basis.

The companys net debt edged up by €59 million and was €5.41 billion at the end of December, with projections the figure to stand at €5 billion at the end of this year, up compared to its previous target of €4.5 billion.

The company is having difficulties in reviving its profits as prolonged weakness in Europe has curbed demand for its services. Additionally, Middle Eastern companies are pushing forward with their rapid expansion and taking market share from their Europe peers.

As a result Air France-KLM said it would postpone or drop between three and four order on aircraft designed for long-haul flights, while also pulling back of operations another three of four planes.

Air France-KLM gained 0.11% on Wednesday and closed at €7.59 in Paris. On Thursday the stock plummeted 6.30% to €7.11 at 13:29 GMT, marking a one-year decrease of 21.82%. The company is valued at €2.28 billion.

According to the Financial Times, the 26 analysts offering 12-month price targets for Air France-KLM have a median target of €8.00, with a high estimate of €10.40 and a low estimate of €3.00. The median estimate represents a 5.42% increase from the last closing price.

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