STOCKS NEWS EUROPE-Air France-KLM flutters after H1

Air France-KLM <AIRF.PA> shares fluctuate in a narrow band about one percent either side of unchanged, in a fractionally weaker market, after posting first-half losses balanced by hopes of returning to operating breakeven by the start of the next financial year.

Most analysts call it a mixed set of results but broker Cheuvreux highlights the airline's overtures to persuade Japan Airlines <9205.T> to leave the Oneworld alliance, and join Skyteam, as a potential positive for the Franco-Dutch group. [ID:nLI204915]

Shares outperform Lufthansa <LHAG.DE> which recently posted third-quarter operating profit down 21 percent to 218 million euros after a boost from one-time acquisition effects.

Air France-KLM targets breakeven by the beginning of the 2010-11 financial year, but notes this target does not take into account the impact of fuel hedging contracts signed before 2009.

Reuters Messaging rm://tim.hepher.reuters.com@reuters.net