Air France-KLM cuts first quarter losses to €417m

Air France-KLM narrowed its first- quarter loss as the passenger count rose and its fuel bill dropped.

The airline has said it will keep negotiating with workers to improve productivity as it seeks to turn around the business.

The operating loss decreased to €417 million ($464 million ) from €445 million a year earlier, while sales rose 1.8 per cent to €5.7 billion, according to a statement from the Paris-based airline.

Currency effects shaved €81 million from the operating result, Air France said.

The carrier has cut more than 7,500 jobs over three years as part of an overhaul aimed at making it more competitive with Deutsche Lufthansa, IAG's British Airways and Gulf carriers such as Emirates.

A previous plan was insufficient to return the group to profitability, and chief executive Alexandre de Juniac is now pressing on with an additional plan that aims to increase productivity further through 2020.

“All the operational initiatives planned within the framework of the new strategic plan Perform 2020 are being deployed,” the airline said in a statement.

“In parallel, negotiations with unions on labor productivity are ongoing.”

Air France-KLM dropped as much as 30 cents, or 3.7 per cent, to €7.85 in Paris, and traded at €7.88 euros earlier this morning.

The stock is little changed in value this year. Air France said it wants to cut debt to about €4.4 billion by the end of the year, aided in part by a hybrid bond, and cut unit costs by 1 per cent to 1.3 per cent.

The full- freighter business will return to operating break-even in 2017, helped by a reduction of the fleet to just five full freighters.

Top management is scheduled to hold an extraordinary meeting with the principal employee council today to discuss plans to boost productivity.

- Bloomberg