Qantas staff are being forced to take leave

Australia's Qantas airline is temporarily cutting 1,000 jobs by forcing staff to go on leave and several Asia-Pacific airlines have announced service cut-backs and cost cuts.

The world airline industry body IATA is expecting a war to bring a 15-20% drop in passenger numbers.

"This comes at the worst possible time for airlines, which are only just beginning to recover from the effects of the September 11 attacks," said IATA spokesman William Gaillard.

Nervous travellers

He said that airlines already facing serious financial problems because of the September 11 terrorist attacks and the global economic slump were likely to be worst hit by the effects of a war.

And the industry as a whole could make substantial losses for the third year in a row.

But Mr Gaillard added that carriers had been preparing for a possible conflict in the Gulf and a war, especially a short one, would be unlikely to cause much disruption to international air traffic.

British Airways said on Tuesday it was suspending all flights to and from Kuwait and Israel.

And Germany's biggest airline, Lufthansa, said it was considering measures to allow passengers who were nervous about travelling because of war to rebook or cancel their flights.

Survival measures

On Monday, United Airlines asked a US bankruptcy court to let it scrap existing labour contracts in order to get itself back on track.

United, the country's second largest carrier, also said it may have to ask all workers to accept a further 9% wage cut to offset the impact of a war against Iraq.

The credit ratings agency Moody's said it was considering downgrading two more US airlines - Delta and Northwest.

And American Airways began formal negotiations with its major unions over pay and benefit cuts in order to try to save it from bankruptcy.