Italian carrier Meridiana Fly saw pre-tax losses trimmed to €31.2 million ($40.1 million) in the quarter to 31 January, a 35% rise on the loss of €47.8 million it recorded in the same period a year earlier, as capacity cuts and network optimisation took effect.
Turnover for the three months fell by €25 million to €111 million against the prior period, as capacity was lowered by 25% and hours flown dropped by 16.3%.
Consequently, fuel costs fell by a quarter to €36.2 million and leasing and maintenance costs were additionally reduced.
Despite its cost-cutting efforts, the airline remains pessimistic about the rest of the year. The Italian economy is mired in recession and, the carrier says, "there remains significant uncertainty about [a] recovery in short-term consumption". Customer demand is unlikely to increase, it warns.
It forecasts it will remain loss making this year, although its deep restructuring programme should begin to stabilise the business, it says.
Discussions with its banks over restructuring its debts are still ongoing. It has additionally requested a temporary extension of its credit lines until at least 31 July, it says.
Meridiana Fly and sister airline Air Italy remain under the close supervision of Italy's civil aviation regulator ENAC, which is renewing their operators' licences on a monthly basis. It remains in negotiations with ENAC as to how to permanently regain the licences, it says.