Air France and KLM were merged in May last year

Net profit for the year to March was 351m euros (�250m; $445m) as the newly-merged group continued to buck the trend of gloom in the air industry.

It was the group's first annual result as a single entity, after the two airlines came together in May 2004.

The group also announced plans to buy five Boeing 777-200 freight planes to replace ageing cargo aircraft.

The first of the planes should enter service for Air France in October 2008, officials said.

The company forecast similar earnings for 2005-06, with 800m euros anticipated from the sale of the Amadeus ticket reservation system.

Air France and KLM fly under separate brand names, but the common management since the merger has brought cost savings and synergies.

The group is now the world's biggest airline by revenue and ranks third behind American Airlines and United Airlines in terms of passenger traffic.