AIRLINES are making last-ditch attempts to stem
haemorrhaging losses as they prepare for a drop in passenger numbers.

Job cuts, route culls and money-saving talks with
employees and unions took place last week as the airlines prepared for a
conflict in Iraq.

Although it refused to divulge details, analysts
believe British Airways has drawn up worst-case scenario plans to cut capacity
by up to 20%, on top of the suspension of its Israel, Muscat and Kuwait routes.

It has also extended its flexible fare policy on
economy long-haul flights and is reviewing the situation daily.

Chief executive Rod Eddington predicted traffic could
fall by between 10% and 20%, while the International Air Transport Association
has estimated a 15% drop in worldwide traffic.

Virgin Atlantic chairman Sir Richard
Branson said he was looking at reducing fares to stimulate demand but ruled out
further job cuts.

Gulf carriers Emirates, Gulf Air, Qatar Airways and El
Al Israel Airlines said they would operate normal services during the war, but
may change flight routes to avoid certain areas.