Air France-KLM has reported a smaller first-quarter loss than expected, but downgraded its capacity outlook on the basis of geopolitical uncertainty tied to the US-Israeli war with Iran and rising jet fuel costs, Reuters reports.

European airlines, including easyJet and TUI , have revised their outlooks as their jet fuel hedges shrink over time. They expect to feel the impact of the closure of the Strait of Hormuz more acutely in the coming months.

“While fuel price increases are not yet reflected in the results we present today, they are expected to weigh on the coming quarters,” Air France-KLM Chief Executive Ben Smith said in a statement.