PARIS (AP) -- Air France-KLM said Friday its losses mounted sharply in the first quarter compared to a year earlier, when earnings were boosted by a gain in the value of oil price hedging contracts the airline uses to manage its fuel costs.
Air France-KLM said in a statement it lost 630 million euros ($821 million) in the January-March quarter, compared to a loss of 379 million euros a year earlier. Last year's result benefited from a 220 million euros gain on the airline's hedging contracts.
The airline, in the midst of a three-year turnaround plan, said it hopes to strengthen its position by paying down debt and reducing staff costs further.
Air France-KLM is struggling to compete against low-cost carriers and has said it expects to cut about 5,000 people in its workforce of 49,000. It said the plan is on track despite "a difficult and uncertain environment."
The company saw passenger activity rise 0.8 percent in the quarter while capacity was held nearly steady. Passenger revenue rose 1.4 percent to 4.5 billion euros.
Shares in the Franco-Dutch holding company dropped 4.3 percent to 7.65 euros a share as of midday Friday.