The newly-formed parent of British Airways saw shares slide today as the air travel industry digested a profits warning from one of its major players.
International Consolidated Airlines Group (IAG), formed last month when BA merged with Spanish carrier Iberia, suffered as Air France-KLM said its full-year earnings would come in below the forecast 300 million euros (£250 million).
The carrier, formed when Air France merged with Dutch airline KLM in 2004, said air traffic control strikes in France and heavy snowfall across Europe had hit its third-quarter sales, while adverse weather in the US and political turmoil in North Africa are expected to further dampen trade.
The warning spooked investors' confidence in the industry, as Flybe and easyJet tumbled with IAG, just weeks after British airlines revealed the negative impact December's weather had on their own profits.
British Airways estimated the disruption caused by heavy snowfall and freezing temperatures cost the airline £50 million, while easyJet took a £31 million hit and Flybe lost £6 million.
IAG shares have dropped around 16% since the company was listed on the London Stock Exchange last month as fears mount over rising jet-fuel prices.
Andrew Fitchie, analyst at brokers Investec, said fears over fuel prices were offsetting the advantages of the BA/Iberia Merger.
He said: "Given the uncertain economic backdrop, we are cautious on airlines' ability to recover fuel cost increases through surcharges."
The BA-Iberia merger was expected to help the airlines save 400 million euros (£337.3 million) a year by its fifth year.
Together, Iberia and British Airways fly to more than 200 destinations on more than 400 aircraft. Last year they carried 55 million passengers.
Air France-KLM posted a net third-quarter loss of 46 million euros (£39 million) between October and December, a period in which it was forced to cancel 6,900 flights. This follows a 241 million euro loss (£204 million) a year earlier.
The carrier also said it will pay more for aviation fuel in the fourth quarter than previously forecast. It expects to pay 1.96 billion US dollars (£1.22 billion) for fuel between January and March.
Earlier in the year, the Paris-headquartered airline was hit by disruption caused by the volcanic ash crisis, strikes and weather problems.