"Worst over for airlines: IATA"

Monday, August 4, 2003

Worst over for airlines: IATA
Cathay Pacific is likely to be the hardest hit by SARS of Asia's airlines. 
The Associated Press

 
HONG KONG, China (AP) -- Airline traffic worldwide picked up sharply in June
but remains depressed following the SARS crisis and a full recovery will
take time, a leading industry official has said. 

"The worst is over, but the road to recovery will be long," said Giovanni
Bisignani, director general of the International Air Transport Association,
or IATA. 

International air traffic was off by 11.8 percent in June, when compared
with the same month a year earlier, but that showed a marked improvement
from the 21 percent traffic plunge in May, according to the Geneva-based
IATA. 

Asia-Pacific airlines, which were hit hardest by SARS, saw a 35.8 percent
dive in traffic during June, compared with a plunge of 55 percent in May.
Severe acute respiratory syndrome sickened more than 8,400 people and killed
more than 800, most of them in Asia. 

Travel advisories from the World Health Organization were imposed on several
Asian areas hit hard by SARS, devastating air traffic in the region. The
disease originated last year in mainland China and was spread by air
travelers from Hong Kong to Singapore, Vietnam and Canada -- all places that
suffered fatal outbreaks. 

SARS has now come under control and with the travel warnings lifted,
airlines are rebuilding schedules and seeing passengers come back. 

Hong Kong's Cathay Pacific Airways Ltd is expected to report its
biggest-ever loss this week, but analysts see the company back in profit in
the second half, Reuters report. 

Cathay is expected to be the hardest hit by SARS of Asia's main carriers. 

It will announce its first-half results on Wednesday, and analysts say the
only question is how deeply its record of strong profits will be slashed. 

Five analysts polled by Reuters expected an average loss of HK$1.2 billion
($153.9 million) for the six months ended June, the company's biggest since
it listed in 1986. 

"The industry turned the corner in June," Bisignani said. "Although we are
still well below where we were at the same time last year, travelers are
returning." 

Bisignani said pent-up demand is helping, as is the summer vacation season
in the northern hemisphere. Many airlines have also been offering a variety
of discounts to lure back the travelers.


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