July 25 (Reuters) - Airline group Air France KLM

on Thursday reported a worse than expected drop in its

operating result, citing unit costs and higher fuel prices,

underscoring cost and revenue pressure weighing on the sector.

The French-Dutch group's operating result decreased by 220

million euros to 513 million euros ($556.55 million) compared to

last year, and below the 547 million euros expected in a

company-provided consensus.

"The second quarter of 2024 confirmed an increasingly

challenging environment for aviation, with rising fuel prices

and a continued pressure on costs," Group CEO Benjamin Smith

said in a statement.

The company highlighted that increases in costs came from

salaries linked to labour agreements at both Air France and KLM

as well as tariff increases at Schiphol and Paris airports, but

stressed that disruption costs had stabilised, namely at KLM.

Air France KLM said it had already taken strong measures

since announcing in April that it would cut costs - which

involved a hiring freeze for support staff - after a first

quarter already marred with disruptions.

Revenues rose by 4.3% to 7.95 billion euros between the

months of April and June, in line with expectations, though the

company noted that the Olympic Games had a 40 million euros

impact.

The group had issued a profit warning earlier this month, as

the Paris Olympic Games - taking place from July 26 to Aug. 11 -

caused some people to rethink their travel plans, Air France KLM

then said in a statement.

German competitor Deutsche Lufthansa earlier this

month slashed its 2024 earnings guidance for a second time and

issued a profit warning for its second quarter last week due to

weaker yields.

($1 = 0.9217 euros)