Franco-Dutch airline Air France-KLM today beat forecasts with a return to profit last year, helped by a drop in the fuel bill and growth in passenger traffic.
The carrier achieved an operating result of €816m, compared with a loss of €129m in 2014, it said in a statement. This beat the average forecast of €544m in a Reuters poll.
Air France-KLM also said it lowered its net debt to €4.3 billion at the end of December from €5.4 billion a year earlier and pledged a "further significant reduction" this year.
The airline forecast a cut of between 0.8-1.2% in unit costs in 2016, and free operating cash flow generation after disposals of between €0.6-1 billion in 2016, compared to €606m last year.
The company cautioned, however, that pressure on ticket prices from increased competition would eat into the benefits of cheaper fuel this year, although it maintained its medium-term financial targets.
"The global context in 2016 remains highly uncertain regarding fuel prices, the continuation of the overcapacity situation on several markets, and the geopolitical and economic context in which we operate," the airline said.
"In consequence, the group expects the expected savings on the fuel bill to be significantly offset by unit revenue pressure and negative currency impacts," the airline added.
Air France-KLM said its fuel costs fell 6.7% last year to €6.18 billion.
The airline added that the impact on revenue of the November 13 terrorist attacks in Paris was estimated at €120ms in the fourth quarter. Three-month revenue nonetheless rose 2.2% to €6.3 billion, it added.