LEITHEN FRANCIS & BRENDAN SOBIE / SINGAPORE
Airlines issue profit warnings as devastating drops in traffic continue despite slow-down in spread of epidemic
As the spread of SARS appears to be slowing down, the virus's financial impact on Asian carriers is only starting to come to light.
Dismal traffic figures for April were released last week by several major carriers and airports from the SARS-battered areas of Asia.
Some carriers also have issued profit warnings and the Association of Asia Pacific Airlines (AAPA) says the effective containment of the SARS epidemic by health authorities in South-East Asia is "not the end of a crisis for the airlines - it is merely the end of the beginning".
Carriers in Hong Kong and southern China, where SARS first surfaced, have been hardest hit. Cathay Pacific Airways says revenue passenger kilometres dropped 58% in April and daily passenger figures plunged 66% to 11,300. In the first half of May, Cathay's daily passenger count dived 39% to 7,000.
"Even with a heavily reduced schedule, current passenger load factors are struggling in the 40% range," says Cathay. "Bookings for the rest of May are no better and we do not expect the recovery, when it comes, to be quick or strong."
Dragonair is faring even worse and ordered mandatory leave for employees last week as part of cost-cutting measures to offset a 90% drop in passengers. China Southern Airlines says its April traffic dropped 40% and it has joined Cathay, Dragonair and China Eastern Airlines in seeking aircraft delivery deferrals (Flight International, 13-19 May).
China Southern Airlines also warned last week of "a significantly negative impact on the group's financial position".
Preliminary revenue figures are also starting to trickle in, including the revelation from EVA Airways that passenger revenues dropped 36% in April to NT$1.59 billion ($46 million).
The AAPA says its 17 members have between them removed 1,150 weekly flights from their May schedules and flights that continue to be operated "have load factors that render them highly unprofitable". The group says it will take "months" to restore the industry.
Source: Flight International
