Investor group VEB said it planned to sue KLM, the Dutch arm of Air France KLM, over dividend payouts VEB considers too small.

"Since 2004, KLM has been paying out a much smaller part of its profits to shareholders than its operational performance justifies," VEB, which represents retail investors, said in a statement on Wednesday.

The suit concerns investors that did not accept Air France's takeover offer in 2004 but remained KLM shareholders, VEB said.

VEB said KLM had paid a dividend of 0.58 euros (USD$0.75) per share for 2007-2008, or 9 percent of profit, while other airlines paid out 50 percent of earnings on average.

A KLM spokeswoman said the company had not received the lawsuit yet, and declined further comment.