Air France KLM reported a 58.4% slump in pre-tax profits for the first quarter of the 2008-2009 financial year.
The airline said its pre-tax income in the three months to June 30 fell to 251m compared to 603m in the same period in 2007.
Its net income in the quarter dropped by 59.4% from 415m in 2007 to 168m this year.
AF KLM said its income from operating activities in Q1 dropped by 53.3% from 537m in 2007 to 251m this year while current operating income slumped by 43.6% from 415m last year to 234m in 2008.
But the carrier reported that despite the global slowdown, there was a 3.7% rise in passenger traffic and a high load factor of 80.3%.
The airline, the largest in the world in terms of revenue, said it was still on course for its objective for 2008-2009 of achieving an operating income of 1bn.
The carrier said operating costs during the quarter rose by 9.5% to 6.05bn. Without the rising cost of oil, this would have been a 5.8% increase.
During the quarter, oil rose by 266m (24.3%) from 1.09bn in 2007 to 1.36bn this year.
* Air France also announced changes to its operations out of London City Airport. It plans to add an extra daily flight to Geneva, bringing the total to five a day and increase capacity on its services to Edinburgh by 20%. But it is also cutting from six to five its daily services to Paris Orly and to Strasbourg from three to two. Its service to Zurich will be suspended from September 8. The other changes will come in on that date as well.
T5 boosts Heathrow hotels
The opening of Terminal Five at Heathrow earlier this year has given a boost to local hotels.
A survey by TRI Hospitality Consulting said in the three months after the opening, the chain hotels around the airport enjoyed an increase in both occupancy levels and room rates.
Occupancy rose by 2.8% to 84.9% while room rates went up 4.9% to £84.32.
Together this gave the hotels an 8.4% increase in revenue per available room (revPAR) to £71.63.
David Bailey, TRI's deputy managing director, said: "Given its status as the gateway to London, Heathrow has always been an important hotel market.
"Since T5 opened Heathrow's hoteliers have generated 2.5% more profit per available room."