Air France-KLM suffered a one-two punch in the quarter ending March 31. In a quarter when business conditions worsened, the company also had to book a heavy provision for possible fines and ended the quarter with a net loss of $852 million.

Revenue for the quarter was up 6 percent to $8.9 billion. A cargo business recovery which began midway through the year picked up in the fourth quarter. Cargo unit revenue rose 8 percent to $1.13 billion and cargo operating income almost broke even with a $1.6 million loss standing as a 95 percent improvement over last year's loss of $34.6 million.

Overall business conditions worsened in the company's fourth fiscal quarter as a slowdown in global economic growth and a sharp rise in oil prices threw Europe's second-largest airline for an operating loss of $72 million. At the same time, an investigation by European and U.S. competition authorities into the air cargo industry made likely a fine amounting to as much as $833 million.

Net income for the full year was $1.17 billion, down 16 percent compared with profit a year earlier of $1.4 billion.

"The Financial Year 2007-08 … witnessed a deterioration in the economic environment during the second half, linked to the crisis in the financial sector and the sharp rise in the oil price. We also booked a provision of 530 million euros on the basis of the current status of the investigation by the European and US competition authorities into the air cargo industry," said Chairman Jean-Cyril Spinetta.

The chairman's forecast "of operating income in the region of 1 billion euros" for the coming year was "based on an oil price of $120/bbl," although that price just hit $135 on Wednesday.