Sector movers: Travel stocks drop on Air France profit warning

8th Jul 2014 14:51

A profit warning from Air France-KLM hit stocks in the UK-listed travel and leisure sector on Tuesday.Both IAG and easyJet were among the top decliners in London after the French-Dutch airline cut its 2014 target for operating profits from around €2.5bn to between €2.2bn and €2.3bn.Despite reporting a 3.9% increase in passenger numbers in June, the company said recent traffic stats "reflect the over-capacity on certain long-haul routes, notably North America and Asia, with the accompanying impact on yields"."This comes on top of the persistently weak cargo demand and the challenging situation in Venezuela identified in the first quarter," it added. The profit-warning came after German competitor Deutsche Lufthansa (-2.4%) also warned in June on its own profit targets for 2014 and 2015 due to weak passenger revenue and cargo trends. London-listed airline peers Ryanair, Aer Lingus and Fastjet were all trading in the red this afternoon, along with travel tour operators TUI Travel and Thomas Cook.Airlines have also made headlines over recent days on the back of reports that US carriers have threatened to confiscate electronic devices that haven't been charged on the back of security fears."With travellers around the world contemplating the prospect of having their phones et al confiscated at security, there are plenty of reasons to be gloomy about the trading outlook for airlines," said David Madden, Market Analyst at IG.Top performing sectors so far todayIndustrial Metals & Mining 1,245.07 +1.98%Mining 17,439.47 +0.51%Life Insurance 7,230.65 +0.28%Gas, Water & Multiutilities 5,995.53 +0.21%Bottom performing sectors so far todayAutomobiles & Parts 8,288.44 -3.04%Travel & Leisure 7,210.66 -1.71%Mobile Telecommunications 4,384.87 -1.65%Technology Hardware & Equipment 1,069.39 -1.65%Construction & Materials 4,095.37 -1.48%BC