Air France-KLM earnings rebound in first quarter

Air France-KLM posted a stronger-than-expected recovery in the first quarter due in part to low oil prices, but warned of geopolitical risks and airline overcapacity while reaffirming its targets for the year.

The Franco-Dutch airline group reported earnings before interest, tax, depreciation and amortisation (EBITDA) of €266m, compared with a loss of €26m in the first quarter of last year.

The carrier also reduced its operating loss to €99m from €417m a year earlier, as revenue rose 0.4% to €5.605bn.

Analysts had forecast positive EBITDA of €162m and an operating loss of €189m on revenue of €5.541bn.

The airline group said the benefit of recent fuel savings could be “significantly offset” in coming quarters by pressure on unit revenue and negative currency swings.

“We see a market under pressure, which has gradually become more under pressure, and we are being very, very cautious, particularly regarding the second quarter,” finance director Pierre-Francois Riolacci said.

Airlines are already boosting long-haul capacity ahead of the summer season, particularly in Europe and North America, whereas the fallout from last November’s Paris attacks continues to affect demand, especially in Japan, Mr Riolacci added.