Air France-KLM has cut its capacity growth forecasts for this year as the Iran war drives up its fuel costs by billions of dollars.

The French-Dutch airline expects its fuel bill to increase by $2.4bn (£1.8bn) this year as a result of the surge in costs since the Middle East conflict began. In response, it has trimmed its expectations for capacity growth to between 2% and 4% this year, down from 3% to 5% previously.

The Air France-KLM chief executive, Ben Smith, said in a statement that fuel price increases were “expected to weigh on the coming quarters”, after the company reported a smaller loss than expected for the first three months of the year. Smith added that the operating environment remained “uncertain”.

Air France-KLM operates a “rolling fuel hedging policy”, which will save the airline $1.5bn. Despite that, the airline’s total fuel bill for 2026 is expected to be $9.3bn, an increase of $2.4bn compared with 2025.…