Air France on Course for Sell-off

Air France said yesterday that it could receive clearance for privatisation this summer but was unlikely to be ready for take-off into the private sector at least until September.

Europe's second largest airline by passenger numbers said that shareholders, including the French state with a 54% holding, could give the go-ahead at the annual meeting in July.

However, chief operating officer Pierre-Henri Gourgeon cautioned: "Immediately [after the annual meeting] there is summer, which is hardly favourable. We are ready for a process which could be launched from the beginning of September, depending on market conditions."

Air France reported net in come for the last financial year of €120m (£86m) - after exceptionals including a €59m provision linked to the suspension of Concorde. That compared with €157m in the year to the end of March 2002.

The group said results in the fourth quarter had been affected by war in Iraq and that a delay in economic recovery and the Sars crisis was affecting the current performance. Capacity and spending had been cut to cope with the downturn, it said. But the last few weeks had seen an upturn in advance booking across its network - except for Asia routes.

"If this continues, Air France aims to post a slightly positive operating income before aircraft disposals for the year," it said, adding that it was proposing a dividend of €6 a share.