The International Air Transport Association believes that the airline industry has turned the corner to recovery, but passenger traffic around the world is still well below last year's levels.
Total international passenger traffic for June was 12% below the 2002 level and, although the SARS epidemic is over, traffic in the Asia-Pacific region in June was 36% less than the same month last year.
This is an improvement on May, which saw a 55% drop, but still disastrous for carriers in China, Hong Kong and Japan.
All Nippon Airways (ANA) and Japan Airlines (JAL) suffered deep losses for the quarter to 30 June. ANA had a group operating loss of ¥28.6 billion ($237 million) on revenues of ¥259.6 billion, while JAL lost ¥76.9 billion on revenues of ¥398.8 billion.
In Hong Kong, traditionally profitable Cathay Pacific Airways suffered a record net loss of HK$1.24 billion ($159 million) for the half-year to 30 June. The carrier describes the SARS crisis as "the greatest commercial challenge in the company's history". Revenue fell 21% during the period.
China Eastern Airlines, China Southern Airlines and Hainan Airlines have also warned of losses.
Meanwhile, analysts warn that United Airlines will have to report significant improvements in its next set of results if it is to have a chance of leaving Chapter 11 bankruptcy protection on schedule by early 2004.
On 1 August, United posted the biggest second-quarter loss of all US majors - $623 million, much greater than last year's $341 million loss despite US government compensation of $300 million for the effects of the Iraq war. Revenue fell 18% to $3.1 billion.
Chief executive Glenn Tilton acknowledges the quarter was "a severe challenge", but says labour cost cuts will help boost third-quarter results. But Standard & Poor's analyst Philip Baggaley says United risks breaching its financing agreements later this year, which could force it into liquidation.
Air Canada, also in bankruptcy protection, reported losses of C$566 million ($403 million) on C$1.95 billion sales for the quarter to 30 June, and sees no prospect of recovery before the second half of 2004.
Source: Flight International
