Cathay will keep its planes flying

Cathay Pacific Airways said yesterday that the carrier has no plans to cease operations after Hong Kong media published a company memo warning that the airline would consider grounding its fleet as a deadly flu-like disease grips the territory.

Cathay's traffic has plunged from about 30,000 passengers a day to below 10,000 and the carrier was losing US$3 million a day since the outbreak of severe acute respiratory syndrome, or SARS, newspapers reported.

SARS has sickened more than 1,100 people in Hong Kong and killed 35. The World Health Organization has said travelers should avoid coming to Hong Kong or neighboring Guangdong province in China, escalating the damage done to airlines and others in the travel business here.

The South China Morning Post quoted director of flight operations Nick Rhodes as writing in a memo: "We forecast the number of passengers could fall to less than 6,000 per day in May, in which case we will have to consider grounding the entire passenger fleet."

"We are literally hemorrhaging cash -- approximately US$3 million per day," Rhodes added.

Cathay spokeswoman Rosita Ng confirmed to The Associated Press that Rhodes had distributed a memo to his staff on Friday after a briefing of Cathay department heads and senior managers by Chief Executive David Turnbull.

The reference to grounding the fleet was Rhodes' "interpretation" of Turnbull's comments, Ng said, adding that Cathay has "no plans to stop operations."

Ng declined to release the memo or discuss it further, calling it an internal matter.

Responding to the leak of its memo, Cathay earlier said it has implemented some contingency measures to "maintain its services, preserve cash and minimize expenditure."

"More measures will be implemented as and when necessary," Cathay said in the statement.

Meanwhile, Hong Kong's Airport Authority said Sunday that traffic at Chek Lap Kok airport has now plunged to about a third of where it stood last year, with 30 percent of the flights canceled in recent days, and warned ``our core business is under threat.''

Hoping to calm public fears over the SARS outbreak that shows no signs of letting up, health officials have released a list of 169 buildings where recent SARS victims have either lived or worked.

Two of the three fatalities reported on Saturday were people in their 30s who had no other known health problems, and officials were trying to figure out what happened in those cases.

Most of those who died have had other severe illnesses and many have been middle-aged or elderly, but the 35-year-old woman and 39-year-old man who died may have sought treatment late, officials said.

The WHO travel warning was issued on April 2, and the number of passengers at Chek Lap Kok has been declining almost daily, from about 54,300 on April 1 to 31,700 on Thursday. This compares with a daily average of 98,600 for the same period last year.

"We're in flow management business. When the flow becomes a trickle, our core business is under threat," said David Pang, chief executive of the Airport Authority.

The Health Department list of 169 buildings where SARS patients have lived or worked shows they have been in all but one of Hong Kong's 18 districts, spreading concerns that SARS has been distributed throughout the territory.

It is not clear, however, whether the victims caught the disease in their homes and offices or elsewhere, said government spokeswoman Josephine Yu.