Air France-KLM posted a first-quarter net loss of 368 million euros (£299 million) today, saying that high fuel costs and a continued drop in cargo had cut into its profits.
The Franco-Dutch airline said revenue grew 6% to 5.6 billion euros (£4.55 billion), but that was not enough to offset the continued slide in the income column. The group made a net loss of 367 million euros (£298 million) in the first quarter of last year.
Despite what the company characterised as a "tough quarter", the results were better than the average consensus of analysts surveyed by FactSet, who had predicted 5.5 billion euros (£4.47 billion) in sales.
Uprisings in the Middle East and tension with Iran have pushed fuel prices up over the past year, and the company said today that its fuel bill rose 18% to 1.7 billion euros (£1.4 billion) in the January to March quarter. Only 1% of that rise was due to higher volumes.
Higher labour costs because of a 2011 salary increase also ate into profits.
The carrier is getting squeezed from both ends, as its costs rise and an important part of its revenue - cargo - drops. The global economic slowdown has weighed on international commerce, and the company said cargo traffic fell 6% in the first quarter.
The one bright spot was improving passenger traffic, which was up 5.5%. Revenue in that business rose 8.8%.
All airlines have struggled during the global recession, but Air France-KLM was also beset by high debt and operating costs. The company unveiled a turnaround plan last year to reduce costs by 10%, excluding fuel, and slash its debt. It is also negotiating new employee contracts.
The carrier said it expected its first-half operating result to be worse than the 548 million euros (£445 million) loss it recorded last year. But it said the its turnaround plan should begin bearing fruit in the second half.