Andrzej Jeziorski/SINGAPORE Chris Jasper/LONDON

South East Asia's major carriers appear to be easing out of the slump which so depressed traffic last year, with Cathay Pacific - the region's most notable victim last year - reporting a 5% increase in passengers during the first quarter of 1998. Thai Airways International enjoyed a 500% increase in net profit for the six months to March 31 and Singapore Airlines (SIA) achieved a slight growth in turnover during the year to the same date.

SIA saw operating profit drop by 27.3% during its financial year, but still achieved a net group profit of S$1.03 billion ($609.5 million), just 0.1% down on the previous year, thus improving on its bleakest projections at the height of the Asian economic crisis. Although the company's pre-tax profit of S$882 million, down by 14.5%, was swelled by the sale and leaseback of four Boeing 747-400s, plus the outright sale of one A310-200 and spares, chief executive Cheong Choong Kong concludes that the airline has delivered "a satisfactory performance, given the sound and fury".

Cathay Pacific, the region's number two carrier by turnover, suffered far more during its financial year to 31 December, taking its first full-year loss since 1963. The Hong Kong-based carrier made a loss attributable to shareholders of HK$542 million ($70 million) during 1998, compared with a profit of HK$1.69 billion the previous year. Turnover fell by 12.9% to HK$26.7 billion.

Although the carrier's trials caused chairman Peter Sutch to say that "1998 will stand out as one of the most difficult years in the history of Cathay Pacific", the picture for next year appears to be improving, with the airline reporting a 2.58 million (5%) increase in traffic for the first quarter.

The more positive Asian outlook is reinforced by Thai's performance in the first half of its current fiscal year, beginning on 1 October, 1998, with the airline reporting a net profit of 8.68 billion baht ($233 million) on revenue of 54.34 billion baht, compared with corresponding figures for the previous year of 1.32 billion baht profit and a slightly higher 55.96 billion baht in operating revenue.

The carrier was hit by foreign exchange losses of 2.52 billion baht during the half, compared with 2.06 billion baht in foreign exchange gains the previous year. However, the airline says that it earned 2.09 billion baht on aircraft sales and saved 1.63 billion baht through a change in accounting procedures, depreciating aircraft over 20 years rather than 14 years as it has in the past.

A further 2.51 billion was saved through reduced fuel costs. Passenger revenue growth forecasts for the second half of the current fiscal year are expected to lead to further improvement, according to analysts.

Source: Flight International