KLM Royal Dutch Airlines NV said it will have a fiscal year loss as a slowing economy and increasing political instability deter passengers from flying and increase oil prices. The shares fell as much as 9 percent.
"As the operating environment in the fourth quarter of the current fiscal year will remain difficult, it is unlikely that a positive operating income for the fiscal year ending March 31, 2003, will be achievable," KLM said.
Concerns about a possible war with Iraq and strikes in Venezuela have pushed oil prices near a two-year high, raising costs for the airline. That resulted in lower third-quarter traffic than the airline expected.
"The economic slowdown, which only seems to be worsening, is stopping people from flying," said Bart Koster, a KLM spokesman, in an interview. "The number of passengers is going down, our costs are increasing and revenue is falling."
Europe's fourth-largest carrier, which had previously forecast a profit for the year ending in March, said December passenger traffic rose 11 percent from year-ago figures depressed following the Sept. 11, 2001, terrorist attacks. KLM didn't specify the third-quarter traffic volume it expected.
"The third quarter wasn't very good," he said. "The fourth quarter is the least profitable and we can't look much beyond that given the economic and political situation."
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