Air France has estimated that a strike by pilots in September will cost it about €500 million lost revenue, in addition to intangible damage to its reputation.
The struggling French-flag carrier was in dispute with pilots over plans to expand its budget subsidiary Transavia.
Pilots were concerned contracts at the low-cost would undermine conditions at the parent carrier.
Finance director Pierre-Francois Riolacci said the company had cut its profit target for 2014 accordingly.
Air France said that total passenger traffic fell 15.9 per cent in September, adding that bookings for the next three months were also down.
The airline put the expansion of its Transavia budget carrier on hold after the two sides agreed to talks.
Air France wanted to expand its budget division to compete with the likes of Ryanair and easyjet.