Europe’s biggest airline, Air France-KLM, admits that it may have been a little too cautious in its profit predictions for the year, and analysts agree. For the first-quarter, ending June 30, the airline said that its operating profit hit 26 million euros. This does not include the 158 million euros the volcanic ash cloud cost the carrier, but the result is strong compared to the period a year earlier when the airline announced a loss of 496 million euros.

Air France-KLM said the better than expected performance was mainly due to a return of the business traveller and an increase in air freight traffic. Sales for the quarter were 5.72 billion euros, a rise of 11 per cent. The carrier claims that sales are already looking very promising for the current quarter.

Analyst Yan Dorocles, of Paris based Oddo Securities, said the airline had been too pessimistic in its outlook. He added that he predicted the airline’s operating profits, before the effect of the volcanic ash cloud, would be in the region of 90 million euros. He went on to say that there had been a healthy growth in ticket sales and ticket prices, and that bookings to October were also extremely encouraging.

IATA has announced global air traffic is now operating above the levels it was at before the economic crisis. However, the recovery in Europe is still the slowest.

Some of this can be blamed on the fact that it was European airlines which were most affected by the closure of airspace when the ash cloud from the Eyjafjallajokull volcano came to disrupt air travel for nearly a week in April.