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Oil prices to knock $2B off this airline’s fuel bill

The slump in oil prices will knock $2 billion of Air France-KLM's fuel bill this year, but the Franco-Dutch airline must continue with its contentious restructuring plans, the chief financial officer told CNBC.

Air-France-KLM reported on Thursday third quarter revenues of 7.4 billion euros ($8.1 billion). This was down 2.4 percent like-for -like, but up 4.2 percent if the impact of high-profile and sometimes violent strikes were excluded.

In conversation with CNBC, CFO Pierre-Francois Riolacci emphasized that the boost from low oil prices was insufficient to change the airline's plans for mass job cuts.

"If you look at the total fuel bill for the year, we expect it to decrease from 2014, when it was $8.9 billion, to about $6.9 billion in 2015 and we expect a further decrease of $1.2 billion in 2016 based on the forward curve and including the hedging portfolios that we have today," he said.

"But again, I would like to highlight that even if we have improved our result, even if the fuel is a big tailwind, we should not ignore that the results that we produce today are not strong enough to catch up, to close the gap with our competitors."

Earlier this month, Air France managers were forced to flee a meeting about job cuts, after angry staff stormed their meeting room. Television images showed airline human resources and labor relations chief, Xavier Broseta, being jostled and his shirt ripped off.

Like its European rivals, IAG and Lufthansa, Air-France-KLM is struggling to cope with low-cost competition inside Europe and fast-expanding long-haul airlines in the Gulf.

Paris-listed shares of Air France-KLM rallied on Thursday before paring gains to trade around 1.3 percent lower. Lufthansa shares also traded lower, by 3.4 percent.

— By CNBC's Katy Barnato. Follow her on Twitter @KatyBarnato.