Air France-KLM suffered a net loss of €895 million in the three months to June.
But the carrier predicted that 2012 full year operating profits would be better than last year.
The company also exceeded investor expectations by more than halving operating losses in the second quarter. The €895 million Q2 net loss compares with a €197 million loss last year.
About €368 million was accounted for by a charge related to its redundancy programme. A further €372 million charge related to fuel price hedging. Finance director Philippe Calavia said the charges would be “much lower” in the second half.
Chief executive Jean-Cyril Spinetta revealed that Air France-KLM was in discussions with Etihad Airways about an alliance.