Air France KLM beat forecasts with its annual operating profit as strong traffic levels and higher savings than expected helped offset high fuel prices.
But the world's largest airline by revenues said its operating result should remain largely flat in 2005/06, when it expected the impact of high oil prices to further intensify.
In its first full-year result as a merged entity, Air France KLM posted an operating income before aircraft sales of €489 million versus €405 million on a pro-forma basis in the year-ago period.
The group's shares were up 2.46 per cent at €13.32 in early trade. Core operating earnings - known as EBITDAR, which excludes operating leases among other items - rose to €2.873 billion from a pro-forma figure of €2.716 billion a year earlier.
Net income for the year 2004/2005 was €351 million, while sales totalled €19.078 billion.
Air France KLM said the impact of high oil prices had totalled €2.65 billion in 2004/05 and that it saw this rising to €3.37 billion in the current year, based on oil prices at above $50 per barrel.