AIR China, the country's largest international carrier, warned that it could post a loss for the first three quarters and said its passenger traffic fell 4 percent for the same period after being battered by a disaster and high fuel costs.

The Beijing-based airline said in a statement to the Shanghai Stock Exchange that its third quarter results, due out on October 29, would be lower as a result of the global financial crisis and the Sichuan earthquake.

The airline's net profit in the first six months of 2008 dived 20.7 percent from last year to 1.2 billion yuan (US$176 million). Based on Chinese accounting standard, its net was 3.4 billion yuan, or 0.287 yuan per share, in the first nine months last year.

Air China chairman Kong Dong said in August high oil prices and the global economic slowdown would affect business for the rest of the year and into 2009.

The carrier flew 25.3 million passengers in the three quarters, a drop of 4 percent from a year earlier and cargo volume fell 1.4 percent to 685,400 tons, it said.

For September alone, the airline flew 4.5 percent fewer passengers at 2.94 million and the load factor fell 7.4 percentage points to 75.8 percent.

JP Morgan lowered its outlook for Air China's revenue from 2008 to 2010 on higher fuel costs and losses from its fuel hedging contracts.

Last week, China Eastern Airlines, the country's third-largest carrier, estimated a loss for the first three quarters because of a weaker aviation market and rising fuel costs. But the airline didn't elaborate.