Cathay Pacific Airways, Asia's fourth largest carrier by passenger capacity said the 11 September attacks pushed its profits down sharply in the second-half of 2001, without any hope for a prompt recovery.

Hong Kong's main carrier posted an 87% drop in net profit at 657m Hong Kong dollars (£59.2m, $84.2m), below analyst's expectations and in a striking contrast to the record HK$5bn in 2000.

Cathay sold 5% less seats in 2001 than in the previous year.

Experts said Cathay, like Singapore Airlines; gets about 40% of its revenues from business and first class tickets, while other Asian companies get about 15% from them.

Business travellers are still reluctant to fly and the company was rather pessimistic about the recovery.

"Full recovery may be a long time coming and will depend to some extent on the recovery of the US economy, fuel costs and our ability to leverage yield", Cathay's chairman James Hughes-Hallet said.

A labour dispute with pilots also weighed heavily on the company's books, knocking off HK$350m.

Shares in Cathay traded 1.3% down on Wednesday at HK$11.7.