Portuguese airline TAP posted a net loss of EUR€112 million (USD$138 million) as seasonal trading, staff strikes and higher fuel costs hit the carrier.
TAP's first-half revenue rose 9 percent to EUR€1.08 billion on passenger numbers up 5 percent at 4.71 million.
TAP, which has a fleet of 55 Airbus aircraft, said it expected a notable improvement in the second half.
On August 2, the government gave the go-ahead to the long-planned privatization of TAP, saying it favored a buyer who would maintain its status as the country's flag carrier. The sale is due to take place by the year-end.
The carrier has attracted interest from several international operators, including British Airways owner International Airlines Group, thanks to fast-growing routes to Africa and South America. Lufthansa has also said it may be interested in TAP.