Air France-KLM reported better than expected annual results that sent its shares to a five-year high on Thursday after the airline benefitted from tight cost management and stronger pricing in the fourth quarter.

Air France-KLM and Deutsche Lufthansa AG promised a reversal of fortunes for 2025 after a year marked by travel disruptions, delivery delays and weak demand, igniting shares of both airlines as investors look to shake off disappointing returns.

Shares soared in early European trading after the carrier group posted better-than-expected profit driven by strong passenger and cargo pricing.

"In the fourth quarter of 2024, Air France-KLM delivered a particularly strong finish, concluding a year shaped by both operational and external challenges," Chief Executive Ben Smith said in a statement.

French airline group Air France-KLM narrowed its losses in the fourth quarter as it achieved higher revenues, the firm reported on Thursday. Looking ahead to fiscal 2025, the company expects capacity to increase by 4% to 5% and unit cost to rise by a low single-digit figure compared to 2024.