Chinese airlines are working to cut operational costs in the wake of the outbreak of severe acute respiratory syndrome (SARS), which is responsible for keeping passengers firmly on the ground.
Official statistics show passenger numbers throughout the country dropped by 81.2 per cent in the first 10 days of this month, compared with the same time last year. In addition to the year-on-year 7 per cent drop in April, industry analysts said most domestic airlines had already been dragged into heavy deficit this year.
As one of the strongest signs of troubled times, it is claimed three major domestic carriers - Air China, China Eastern Airlines and China Southern Airlines - will delay the delivery of new aircraft.
China Southern may delay the delivery of 20 Boeing passenger planes and two cargo aircraft between now and 2005, given the sharp decrease in the number of people using its service.
China Eastern is expected to put off the delivery of 12 Airbus planes, while Air China is believed to have cut the delivery of 15 new aircraft to eight.
Located in the SARS-affected Guangzhou, China Southern plans to ground six of its nine large Boeing-777 planes later this month. Routes using Boeing-777s have been either stopped, or are now serviced by smaller aircraft. From the beginning of the month, employee bonuses were halved to reduce costs and bonuses for senior officials were stopped.
China's flagship airline, the Beijing-based Air China, is another victim of SARS. The airline grounded 2,100 flights last month due to the sharp decrease in passengers. Li Guoxiang, general manager of the carrier, said it would stop more flights this month if passengers continue to stay away.
"Air China's plan to list on the stock market later this year might be delayed because of the negative impact from SARS," Li admitted. Despite the widespread feeling of dismay within the industry, the cargo business has hit a high.
Sources with China Southern say all of its cargo planes are running at capacity and there are plans to get more planes flying to the hot destinations. The cargo boom has helped China Eastern's freight fleet reach its annual volume in the first few months
