Finance
Cheap fuel, strong revenues: Air France-KLM dodges Q1 tariff uncertainty
Published by Global Banking and Finance Review
Posted on April 30, 2025
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Published by Global Banking and Finance Review
Posted on April 30, 2025
By Joanna Plucinska
LONDON (Reuters) -Franco-Dutch airline group Air France-KLM on Wednesday reported better than expected results 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.
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.
"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 demand to its hub, Paris, and that it planned to mitigate risks from tariff turmoil by diversifying its routes and shifting capacity if needed.
The group reported an operating loss of 328 million euros ($373.85 million) for the first quarter, compared to a 370 million euro ($421.73 million) loss expected by analysts polled by LSEG.
That's an improvement of 161 million euros ($183.51 million)over the same quarter last year.
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)
