Spanish airline Iberia posted a narrower-than-expected first- quarter operating loss, as more stable passenger revenues and cost cuts were helped by a 21 per cent fall in fuel costs.

Iberia said its January-March loss before interest and taxes narrowed to €75.5 million from €147 million in the 2009 period.

First quarter revenues fell 4.4 per cent to €1.05 billion, in line with capacity cuts, while the carrier’s net loss was more nearly halved to €52 million.

Analysts had forecast a net loss of €57 million.

Iberia plans to finalise a merger with British Airways this year to better fight a tough industry downturn.

The world’s airlines lost about $9.4 billion last year due to the recession. – (Reuters)