Air France-KLM Cargo Lost $7.8M.

BYLINE: Bruce Barnard

Air France-KLM, Europe's largest airline, said its cargo unit fell into the red amid stiffer competition on Asian routes in the second quarter.

The cargo division, Europe's second-largest after Lufthansa Cargo, swung to a loss of $7.8 million from a $44.2-million profit in the second quarter of 2005. This squeezed first-half cargo earnings to $28.6 million from $58.2 million.

The company blamed the second-quarter loss on a "highly competitive" environment, particularly in Asia, and rising fuel prices which hit its freighters harder than its younger, more fuel-efficient passenger aircraft.

Cargo revenues gained 3.7 …