Europe's fourth largest airline KLM has reported a 6.8% fall in passenger numbers in April due to the Sars virus.

The Dutch flag carrier said total passenger traffic on its Asia-Pacific routes plunged 24% during the month from the same period of last year.

KLM is the first major European carrier to release passenger figures for April, which are being closely watched by investors to gauge the effect of Severe Acute Respiratory Syndrome (Sars).

Hong Kong carrier Cathay Pacific said on Monday it would half its final dividend for last year due to Sars and the Iraq war.

Industry disease

The airline industry has been in severe decline since before the 11 September terrorist attacks in 2001, due to the global economic slowdown.

Sars is the latest crisis to hit the industry, coming after the wars on Iraq and Afghanistan.

Cathay Pacific cut 45% of its weekly flight schedule last month due to the drop off in passenger traffic cause by Sars and the war.

KLM has cancelled flights to Asia destinations, including Hong Kong and Beijing.

KLM shares, which have lost over a quarter of their value this year and hit a record low in March, gained 1.2%.