Air France-KLM, the world's biggest airline, today said its cargo business returned to profit in the first quarter from a year-earlier loss.

The Franco-Dutch carrier's cargo fleet booked an operating profit of 17 million euros [$26.5 million] in the three months to June 30 compared with a loss of 17 million euros in the same period in 2007.

The company attributed the turn-around in cargo, which began in the second half of 2007, to a rejuvenation of its fleet and tight cost controls. Cargo revenues rose 10.5 percent to $1.19 billion from $1.07 billion after a negative current impact of 6.1 percent. Traffic rose 1.5 percent on a 3 percent increase in capacity while the load factor, or portion of space filled, slipped one percentage point to 66.2 percent. The carrier transported 372,000 metric tons of freight during the quarter.

Revenue per ton of cargo transported one kilometer, a key measure of profitability, surged 17.1 percent.

In June, the carrier agreed to pay a criminal fine of $350 million to the U.S. Justice Department for its role in an international air-cargo cartel that fixed freight rates for over five years.

Overall operating profit fell to $365 million $647 million as the spike in oil prices and the global economic slowdown impacted the passenger division.

Bruce Barnard, The Journal of Commerce