Cathay Pacific, determined to reduce its rate of cash burn, will cut passenger capacity by 8%, cargo capacity by 11% and ask its entire work force to take unpaid leave. The Hong Kong airline is negotiating to sell five aircraft and will park two more Boeing 747-400BCF freighters, adding to three already grounded, and wet-lease a sixth to its subsidiary Air Hong Kong. Another subsidiary, Dragonair, will cut capacity by 13%.

Air China is seeing signs of market recovery, particularly in Chinese domestic demand for both air travel and freight. The carrier, the only major Chinese airline not to get state aid, says it has asked the government for more capital and still hopes it might get some. In the meantime, it is cutting capital spending but confirms expectations that its fleet will grow moderately this year.

Chinese domestic air travel is growing strongly again, according to first-quarter traffic statistics for the Big Three Chinese airlines. Even allowing for weak international demand, the companies are enjoying rises in network traffic that foreign competitors could only envy. China Eastern, for all its financial woes, says its first-quarter domestic traffic was up by a spectacular 24.4% on a year earlier.