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PARIS, Feb 22 AFP

February 22 2013, 8:03PM

Air France-KLM reported a net loss of 1.2 billion euros ($A1.56 billion), worse than a loss of 809 million euros in 2011, but said that underlying prospects were improving despite heavy fuel and restructuring costs.

Air France-KLM has suffered from a fall of competitiveness in recent years, under the pressure of low-cost operators and the rise of airlines in the Middle East and in Asia.

In January of last year, the company announced a vast restructuring plan called "Transform 2015."

The group cut its operating loss in 2012 to 300 million euros from a loss of 353 million euros in 2011.

This was better than the average figure expected by analysts polled by Bloomberg financial agency of a loss of 334.6 million euros.

In the fourth quarter of last year, the operating loss was reduced to 143 million euros from 202 million euros 12 months earlier.

Net debt, which weighs heavily on the group, fell by 540 million euros to slightly less than 6.0 billion euros.

Sales rose by 5.2 per cent to 25.6 billion euros.

Financial director Philippe Calavia said on Friday that 2012 was an important year for the group because decisions about the structure and transformation of the company had been taken.