Air France-KLM Group has seen its stock rise this morning, as Europe’s largest carrier raised its full-year profit forecast.

The French carrier forecast an operating profit for the year ending March 2011 on resurgent bookings, from an earlier prediction for breakeven.

The news led airlines across Europe higher as optimism spread through the market.

Air France jumped 55 cents, or 4.2 per cent, to €13.67, in Paris this morning, with British Airways up 0.9 per cent in London.

Deutsche Lufthansa AG climbed 0.6 per cent in Frankfurt.

Aviation has been undergoing a resurgence in the second half of 2010, with the International Air Transport Association (IATA) suggesting the recovery is well underway.

The industry trade body tripled its forecast for 2010 airline profit to $8.9 billion in September.

Air France raised its target to reflect “the revenue performance of recent months, together with the current level of forward bookings,” the Paris-based carrier said in a statement yesterday.

The company had previously pledged to reach breakeven before the deduction of the impact from April’s Icelandic volcano eruption.

The eight biggest US carriers - including United Airlines, Continental Airlines and Southwest Airlines - last week posted their highest profits in three years on rising fares.

Strike

Air France-KLM has, however, been hit by the ongoing industrial action in France.

Some air traffic controllers’ trade unions are expected to take part in the latest round of strike action, expected to hit France tomorrow.

As a result, French Civil Aviation Authorities have limited the number of flights, with the airline cutting “some” domestic and European flights.