THE HAGUE (AFP) - A Dutch court upheld a new environmental tax on air travellers Thursday as airline KLM warned the levy could cause it to lose up to a million passengers this financial year.

The appeals court in The Hague ruled that the tax did not contravene European law or the international civil aviation convention, reported Dutch public broadcaster NOS.

Aviation companies had challenged the tax in the appeals court after a lower court also ruled in favour of the government in March.

Meanwhile, KLM spokeswoman Marisca Kensenhuis told AFP Thursday: "Indications are that the implementation of this tax on a yearly basis will cost the KLM group half-a-million to maybe a million passengers."

In 2004, the company fused with Air France to form a new umbrella group with two distinct airlines.

The Dutch leg of the group comprises KLM, its budget airline Transavia, and regional European airline Cityhopper. Kensenhuis was confirming statements to a local newspaper by KLM chief executive officer Peter Hartman.

She said the company's calculations were based on a "significant" drop in the number of current pre-bookings compared to last year."

"In monetary terms, we have no calculations yet," she said. "But it is something we will have to look at.

"This tax couldn't have come at a worse time, combined with extremely high oil prices and the difficult economic situation in the world."

The Dutch government imposed an environmental tax from July 1 on all travellers departing airports in The Netherlands -- an extra 11.25 euros (about 18 dollars) per ticket for European flights, and 45 euros for longer journeys.

KLM fears its passengers will now opt for flights from neighbouring Germany and Belgium.

Kensenhuis said Hartman wrote a letter to parliament last month, urging it to reconsider.

"He sought to alert them to the fact that the airline industry has flown into heavy weather," she said. "Every dollar rise in the fuel price costs the airline industry a total of 1.6 billion dollars."

KLM carried 23.4 million passengers in the 2007-2008 financial year.

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