KLM cargo surges as passenger traffic sinks

KLM cargo surges as passenger traffic sinks

KLM Royal Dutch Airlines, Europe's fourth-largest carrier, on Wednesday said the performance gap between its thriving cargo division and struggling passenger operation widened significantly in May, driven by a surge in freight traffic on Asia/Pacific routes.

Cargo shipments rose 8 percent in May from a year ago, while passenger traffic slipped 10 percent, primarily due to the effects of the SARS virus on Asia/Pacific routes which suffered a 35 percent decline in traffic.

KLM said cargo traffic on Asia/Pacific routes soared 15 percent year-on-year on a 10 percent increase in capacity resulting from the introduction of two new Boeing 747-400 extended-range freighters and the full deployment of its fleet of combi passenger/freight aircraft. Load factor, or the portion of space filled, rose by 3.1 percentage points to 82.7 percent.

Cargo traffic on the North Atlantic remained buoyant, rising by 9 percent on a 3 percent increase in capacity, which boosted the load factor by 4.1 percentage points to 73.5 percent.

The gap between the two divisions, highlighted by last week's announcement that cargo made an $85 million profit last year while the passenger unit lost $24.5 million, is expected to widen as freight appears immune to the SARS virus.

KLM Chief Executive Leo van Wijk said business in the first quarter ending in June is "lousy" and that it is too early to be optimistic about an upturn in traffic.

"If there is [a recovery] it is only very marginal," he said.