Air France-KLM has raised ticket prices and pared expansion plans after Iran war disruptions sent oil soaring, forcing $2.4bn in extra fuel payments this year. Capacity growth drops to 2-4 per cent from 3-5 per cent, while capital spending will undershoot €3bn. Hiring of non-operational staff stops immediately as the French-Dutch airline group shields margins against volatile markets.

Fuel costs climb to about $9.6bn, including $1.1bn in the second quarter alone, even with hedges that blunt immediate spikes. Global prices doubled after conflict redirected Asia-Europe flows, boosting early demand and prompting deployment of larger jets on rerouted services. Yet unhedged exposure and future contracts lock in painful premiums that threaten recovery.

Chief executive Ben Smith admits higher prices pressure performance through the quarters ahead, forcing disciplined cost control amid narrower first-quarter losses. Operating loss fell to €27mn from €328mn as revenues rose 4.4 per cent to €7.5bn. $2.4bn in unplanned fuel outlays offsets gains, confirming severe industry strain.