Asian airlines are particularly vulnerable

Australian flag carrier Qantas will cut more jobs after warning its profits will be lower due to a slump in air travel caused by the deadly Sars virus.

Last month, Qantas forecast its net profit for the year to the end of June would be 15% lower than expected at A$594m (�237m; $392m).

Qantas, which is rated as one of the world's most profitable airlines, did not give a new target figure.

Chief Executive Geoff Dixon said all areas of the airline's operations had been affected by the fallout from severe acute respiratory syndrome (Sars).

"While our international and domestic airlines have been worst hit, there has also been a flow through to all our subsidiaries including Qantas Flight Catering, Qantas Holiday and Australian Airlines," he said in a statement.

Travel fears

KLM, British Airways and other major airlines have reported significantly lower passenger traffic this week, blaming the war on Iraq and Sars.

Qantas reported bookings on flights to Hong Kong have fallen 64%, by 30% to Japan and by 14% to the UK.

"All international routes have been affected," he said.

Qantas will extend its cost-cutting measures by cutting more staff and changing working practices, he added.

Last month the airline said it would lay-off 1,000 workers from its 35,000 strong staff.

Some aircraft will also be retired and deliveries on new planes delayed.

Qantas, which is 17% owned by British Airways, fell 4% to A$3.04 on the Australian Stock Exchange following the warning.