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China Eastern Cuts More Flights, Forecasts Loss

Thu May 22, 2003 4:01 pm

Shanghai, May 22 (Bloomberg) -- China Eastern Airlines
Corp., the nation's third-biggest carrier, said it cut more than
60 percent of its scheduled flights ``in the past few days''
because SARS has curbed travel demand. The airline reiterated it
will probably make a loss this quarter because of the slump.
``We are filling 30 percent to 40 percent of our seats, even
after the cut,'' Company Secretary Luo Zhuping said in a telephone
interview. ``We will probably post a loss this quarter.''
Asian carriers including Cathay Pacific Airways Ltd.,
Singapore Airlines Ltd., Japan Airlines System Corp. have canceled
1,150 weekly flights as people declined to travel to places
affected by SARS. China is the worst-affect country, accounting
for more than two-thirds of the world's reported cases.
Severe acute respiratory syndrome has affected more than
7,900 people worldwide and killed 662, according to World Health
Organization figures. China, which has more than two-thirds of the
world's SARS cases.
China Eastern's latest cancellations come after it cut 58
percent of its flights last month.
The Shanghai-based airline also scrapped its 2002 final
dividend of 0.02 yuan last month, saving the airline 97 million
yuan ($11.7 million) cash.
China Eastern Air Holding Co., which owns Hong Kong-listed
China Eastern Airlines and three other mainland domestic carriers,
may post a combined loss of 2.3 billion yuan ($278 million) in May
and June should SARS persist, said Daniel Song, assistant to Group
Chairman Ye Yigan.
The group, which owns China Northwest Airlines, Yunnan
Airlines, and Wuhan Airlines, carried about 100,000 passengers in
the first fifteen days of May, down 80 percent from a year ago,
said Steel Chen, secretary of the president's office. It's losing
20 million yuan a day, Chen said.
China Eastern group plans to cut about 70 percent of
scheduled flights in June, after reducing about 75 percent in May,
Song said. It has grounded about 60 percent of its 142 aircraft,
he said.
Air China's shares, which trade in Hong Kong, rose as much
as 2.2 percent and were 1.1 percent higher at 93 Hong Kong cents,
at 11:25 a.m.

cheers robin