Chinese airline staff are checked for Sars

According to official statistics, passenger numbers fell 81.2% in the first 10 months of the year compared with the same time last year, the China Daily reported.

Industry analysts told the newspaper that most domestic airlines had already been dragged into the red.

And three airlines, Air China, China Eastern Airlines and China Southern Airlines might not take delivery of 39 new planes this year.

Thousands of flights have been cancelled and the airlines are ready to ground more if passengers continue to stay away.

Air China's plans to list on the stock market this year could also be delayed.

Tourism hit

The effect of the Sars virus is being felt by other airlines in the region.

Asia's biggest carrier, Japan Airlines, reported a surprise operating profit.

Sars is hitting Honda's production plans

But it warned that it expected to go back into the red this year because of the impact of Sars.

Thai Airways made slightly higher profits in the January to March period compared with last year.

But this was before the Sars problem and analysts say Thai Airways could go into the red in the April to June period.

Bank of Thailand governor Pridiyathorn Devakula said this week that Sars would cut tourist arrivals by half during April to June and by a third between July and September.

Car production stalls

The virus has prompted car maker Honda to consider delaying production of a new model in China because of the Sars outbreak.

The company said it had called back about 100 engineers who were in China to oversee the production of the four-door Fit.