PARIS, April 30 (Reuters) - Air France-KLM narrowed its losses in the first quarter on the back of cost cuts and lower fuel prices, and announced a breakthrough contract in China for its maintenance business, the France-Dutch group’s only profitable division.
Europe’s second-largest network carrier by revenue reaffirmed its financial targets for the year in the face of “tough” conditions, as first-quarter operating losses declined to 445 million euros ($615 million) from 532 million a year earlier.
Revenue rose 2.2 percent to 5.554 billion euros, and EBITDA losses (earnings before interest, tax, depreciation and amortisation) more than halved to 50 million.
“We weren’t helped by the economic climate, nor did it get worse, but there is no oxygen from that side of our business,” Chief Executive Alexandre de Juniac said.
Air France-KLM said it had won a contract worth over $1 billion from Air China to maintain 20 Boeing 777 aircraft in China in a deal that could be extended to eight freighters.
De Juniac told reporters Air France expected to sign a codeshare agreement with Air Berlin in the coming weeks and did not rule out re-investing in Italian carrier Alitalia, which is now negotiating with Abu Dhabi’s Etihad after Air France let its shareholding slide last year.
Air France-KLM’s position on Alitalia has not changed, he said. ($1 = 0.7237 Euros) (Reporting by Cyril Alymeyer, Tim Hepher; Editing by James Regan)