Paris  - A provision for a possible fine by US and European cartel authorities took a big bite out of profits for French air carrier Air France-KLM in fiscal year 2008, the company said Thursday.

The provision of 530 million euros (837 million dollars) for a potential fine for alleged air freight price-fixing led to a 16 per cent year-on-year drop in profits for the group, to
748 million euros, Air France said in a press statement.

However, profits without exceptional elements rose by 10.8 per cent, to 987 million euros, on turnover of 24.11 billion euros, up 4.5 per cent over fiscal year 2007. The company's fiscal year ends on March 31.

Despite the impending judicial decision, Air France said it would recommend that dividend payments be increased by 21 per cent, to 0.58 euros per share.

The company said that, on the basis of a price of 120 dollars per barrel of crude oil, it is looking to post operational profits in the present fiscal year of about 1 billion euros. In fiscal year 2008, operational profits stood at 1.4 billion euros.

Perhaps because of the continuing rise in the price of oil, which had climbed above 134 dollars per barrel, the Air France share price plunged by nearly 10 per cent in early trading on the Paris Bourse, to 16.80 euros. (dpa)