NICHOLAS IONIDES / SINGAPORE

Asian airlines are continuing to make severe cuts in response to a dive in demand caused by the combined effects of the war in Iraq and the spread of the SARS virus.

Singapore Airlines (SIA), having already slashed services across its network, has put off plans to order aircraft as "management is preoccupied with other pressing matters"

Earlier this year SIA issued a request for proposals to Airbus and Boeing covering planned new aircraft purchases to replace some of its remaining Airbus A310s and Boeing 747-400s. The airline says it is deferring the fleet modernisation until further notice.

Although SIA will not say how badly its business has been affected, analysts believe its load factors are running at just 40-45%.

In Hong Kong, Cathay Pacific Airways and Dragonair are suffering badly, having cut services by 37% early in April while Dragonair made a further 23% cut last week. Dragonair makes most of its money from services to China, which has been worst affected by SARS.

Cathay chief executive David Turnbull said in the carrier's in-house newsletter last week that it "has now entered its most dangerous time in terms of its commercial future in the 26 years that I have been involved with the company ...the combination of SARS and war in the Middle East has annihilated our passenger bookings".

At that time Cathay's system-wide load factors were believed to have been running at only 30-35%.

Japan Airlines, Korean Air, Qantas and other carriers have slashed services, while some foreign carriers have suspended flights or reduced frequencies to affected countries.

Chinese carriers have not revealed capacity cuts, but are believed to be suffering badly. Maintenance firms say they received requests last week from several airlines to move up scheduled overhauls because of excess capacity.

Vietnam Airlines has, meanwhile, cancelled plans to lease an additional Airbus A321 from International Lease Finance, according to an industry source.

Source: Flight International