Spanish airline Iberia, which is merging with British Airways (BA), has reduced its quarterly losses by 44% after a rise in its passenger revenues.
Also helped by cost-cutting work, its net loss for the January to March period was 52m euros ($65m; £45m).
Iberia's revenues per passenger rose by 3.7% from a year earlier and it trimmed its workforce by 5.2%.
BA and Iberia signed a deal to merge last month, expecting it to be completed by the end of this year.
They hope that the merger will save the two airlines a combined 400m euros a year.
The new company will be called International Airlines Group, but the BA and Iberia brands will continue to operate as normal.
BA shareholders will own 55% of the business, which will have its headquarters in London.
The world's airlines lost a collective $9.4bn (£6.5bn) last year, as customers reduced air travel during the recession, according to the International Air Transport Association (IATA).
IATA expects this loss to narrow to $2.8bn this year, as the sector slowly recovers.