AIR FRANCE-KLM PARIS (Reuters) - Air France-KLM (>> Air France-KLM) posted a stronger-than-expected recovery in the first quarter due in part to low oil prices, but warned of geopolitical risks and airline overcapacity while reaffirming its targets for the year.
The Franco-Dutch airline group reported earnings before interest, tax, depreciation and amortisation (EBITDA) of 266 million euros (210 million pounds), compared with a loss of 26 million in the first quarter of last year.
The carrier also reduced its operating loss to 99 million euros from 417 million a year earlier, as revenue rose 0.4 percent to 5.605 billion, it said on Wednesday. Analysts had on average forecast positive EBITDA of 162 million euros and an operating loss of 189 million on revenue of 5.541 billion.
The airline group said the benefit of recent fuel savings could be "significantly offset" in coming quarters by pressure on unit revenue and negative currency swings.
"We see a market under pressure, which has gradually become more under pressure, and we are being very, very cautious, particularly regarding the second quarter," Finance Director Pierre-Francois Riolacci told reporters.
Airlines are already boosting long-haul capacity ahead of the summer season, particularly in Europe and North America, whereas the fallout from last November's Paris attacks continues to affect demand, especially in Japan, Riolacci added.
French network Air France said it was dropping plans to increase its long-haul network by 10 percent by 2020 and limited itself to taking the first Boeing (>> Boeing Co) 787 Dreamliners from autumn 2016 in the absence of an agreement with pilots.
It also decided to introduce 20-30 million euros of annual savings left over from its Transform 2015 restructuring plan, a move which could trigger renewed tensions with pilot unions.
(Reporting by Cyril Altmeyer and Tim Hepher Editing by James Regan)
