Air France warns on fuel prices

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Shares in Air France KLM have fallen almost 9% after the warned fuel prices would hit its profits this year.

The group reported pre-tax profits of 1.15bn euros ($1.81bn; £915m) for the year to the end of March, up 2.8% on the previous 12 months.

It reported operating profits of 1.41bn euros, but predicted that it would make only 1bn euros in the coming year.

Air France KLM also blamed the slowdown in the US economy for damaging its outlook for the current year.

"The current year is set to be challenging, with the oil price and global economy creating significant uncertainty," said its chairman Jean-Cyril Spinetta.

Even the 1bn-euro prediction is based on the assumption that oil will be $120 a barrel.

Earlier on Thursday, oil prices set records above $135 a barrel.