By Joanna Plucinska
LONDON (Reuters) -Franco-Dutch airline group Air France-KLM reported better-than-expected results on Wednesday as it saw strong revenues and a drop in jet fuel costs, despite worries about the knock-on impact from U.S. President Donald Trump’s tariff threats.
Shares were up 2.3% at 0910 GMT.
European airlines have been on alert for possible repercussions from global economic uncertainty tied to tariffs, although carriers like Lufthansa have said they’ve yet to see a notable impact on demand or earnings.
Air France-KLM said earlier this month that it would consider dropping economy ticket prices on its transatlantic routes if needed. Still, it maintained its outlook for 2025, confident that it would navigate the uncertainty.
“The increasingly uncertain context may bring additional headwinds going forward, yet we believe Air France-KLM is uniquely positioned to adapt and perform, thanks to its diversified network,” Chief Executive Ben Smith said in a statement.
The company said it benefited from ongoing travel demand to its Paris hub and more broadly to Europe, and that it planned to mitigate risks from tariff turmoil by diversifying its routes and shifting capacity if needed.
Premium economy bookings were also doing particularly well, with growth in bookings seen to destinations like Canada and Latin America, Smith told analysts on a call.
Lower jet fuel prices also helped its results. Revenues soared 7.7% compared with the same quarter last year to 7.2 billion euros ($8.18 billion).
The group reported an operating loss of 328 million euros for the first quarter, compared to a 370 million euro loss expected by analysts polled by LSEG.
That’s an improvement of 161 million euros over the same quarter last year.
Capacity was also up 4-5% compared to 2024, while its planes remained relatively full with a load factor of 86%.
Air France-KLM has seen a turnaround since last year, when it struggled with spiralling costs and difficulty in particular at its Dutch airline KLM.
Chief Financial Officer Steven Zaat warned on an analyst call that costs may peak in the high single digits in the second quarter due to fees at Amsterdam’s Schiphol airport, but otherwise they expect costs to remain under control.
The first quarter is often the weakest for airlines given lower bookings between January and March. Airlines make up revenues in the busy summer travel season.
($1 = 0.8773 euros)
(Reporting by Joanna Plucinska; Editing by Chizu Nomiyama, Kim Coghill, Sharon Singleton and Raju Gopalakrishnan)
