LONDON (Reuters) - Air France-KLM reported on Thursday a better-than-expected annual result for 2024 as its ongoing efforts to contain costs paid off with a strong performance in the fourth quarter.

European airlines had strong demand in 2024 but struggled to shake off the impact of labour strikes, rising inflation and maintenance costs.

The group warned in November that its costs in 2024 might be higher than expected, primarily due to higher staff and maintenance costs at Dutch carrier KLM.

But in the fourth quarter, Air France-KLM reported an operating profit of 396 million euros ($427.28 million), nearly double the 205 million euros expected by analysts polled by LSEG, driven by increased passenger numbers and cost containment efforts.

"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.

Air France-KLM reported a 6.4% fall in full-year operating profit to 1.6 billion euros ($1.73 billion), better than the 1.35 billion euros ($1.46 billion) expected by analysts polled by LSEG.

($1 = 0.9268 euros)