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Lufthansa adds Asian flights as SARS threat wanes

Deutsche Lufthansa AG, Europe's third-biggest airline, is adding more flights to cities in Asia, the latest in a slew of carriers to restore service to the region as the threat from severe acute respiratory syndrome wanes.

Lufthansa, based in Cologne, Germany, will fly to Beijing five times a week as of next month, compared with three flights to China's capital currently, the company said in a statement sent by e-mail. Starting in August, Lufthansa will service Beijing, Hong Kong and Shanghai on a daily basis, the airline said.

"We seem to have passed through the trough in the Asian-Pacific travel region," chief executive officer Wolfgang Mayrhuber said in the statement.

"We're hoping for a rapid normalization of traffic and rising demand in the region," he said.

Lufthansa joins companies including Continental Airlines Inc, the fifth-biggest US carrier, and UAL Corp's United Airlines in restoring service to Asia, where the outbreak of SARS has stymied air travel. The disease caused demand for flights to the region to drop by as much as 86 percent, Lufthansa said.

Carriers worldwide have cut 1,150 flights since mid-March as SARS and the war in Iraq deterred travel. The Association of European Airlines expects member carriers to lose as much as US$2.5 billion this year because of SARS and the war in Iraq.

SARS has infected 8,462 people worldwide, killing 804, according to the World Health Organization. More than four-fifths of the cases are in China and Hong Kong, according to the UN agency. Taiwan has the third-most number of infections, forcing EVA Airways Corp, the country's second-largest carrier, to cut its profit goal by 94 percent on slowing demand.

Lufthansa this week said it expects to begin attracting more customers now that the spread of SARS is receding. The company last month, predicted a full-year loss before interest and tax after the SARS outbreak and the war in Iraq led to a bigger-than-expected first-quarter loss.

The German company, which has its main operations at Fraport AG's Frankfurt Airport, has cut investment by 200 million euros (US$232 million), grounded aircraft and reduced pay and work hours of 52,000 German employees amid falling demand for air travel.

European airlines' traffic, measured as the number of passengers multiplied by the distance flown, fell an average 5.9 percent in the week to June 8, slowing from an 8.2 percent drop a week earlier, the association said earlier this month.

Lufthansa posted full-year earnings before interest and taxes of 718 million euros last year. The net loss in this year's first quarter, which Lufthansa calls its "weakest" period of the year, widened to 356 million euros from 186 million euros.

Japan Airlines System Corp, Singapore Airlines Ltd and Cathay Pacific Airways Ltd, which cut more than 1,150 weekly flights last month because of SARS, are also restoring service.

Cathay Pacific, Hong Kong's largest carrier, plans to reinstate 170 weekly flights next month, operating 71 percent of its full schedule, up from 55 percent in April, the company has said.
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