For Cathay, 2003 has been its worst year ever

The airline - which has historically been among the more successful in a fragile industry - said it lost HK$1.24bn (US$159m; �99m) after taxes in the first half of 2003, having turned a $1.41bn profit in the same period the year before.

The loss was the result of a slide in sales of more than a fifth despite a strong start to the year, as both business and holiday travellers ditched plans to fly in or to Asia, for fear of the virus.

Airlines across the region slashed flights, grounded planes and planned sweeping staff cuts in response.

In the past week alone Singapore Airlines, Japan Airlines System and All Nippon Airways have all reported losses as well, while the total for airlines worldwide is estimated by the International Air Transportation Association to be $6.5bn.

"This was without a doubt the most challenging period in Cathay Pacific's history," said the airline's chairman, James Hughes-Hallett.

Cathay's shares dipped about 2% to HK$10.80 on the announcement. The virus saw them fall 30% in less than a month earlier this year fom HK$11.85 to HK$8.40, although they have since recovered most of the ground.

Drastic measures

Cathay's problems with Sars were two-fold: it was one of those worst affected by the disease, and it also suffered a backlash from the refusal by the government on the Chinese mainland - and of Hong Kong itself - to admit the real scale of the problem.

The disease claimed 297 lives in Hong Kong from some 1,800 infections, putting it in second spot after China's 348 fatalities out of more than 5,200 sufferers.

The effect was to slash travel within the region by a third, Cathay said in April.

At one point, internal memos warned that the fleet might have to be grounded altogether.