Singapore Airlines has warned it could soon be reporting a loss for the first time in its 31-year history as the Sars virus hits passenger numbers.
The warning dampened any enthusiasm for the airline's latest set of results, despite a 68% jump in profits for last year.
The results did not include the effects of the Sars crisis that struck in mid-March.
Singapore Airlines, one of Asia's most profitable carriers, said Sars had since meant such a drop in numbers that unprecedented job cuts would be necessary.
"The financial year has started depressingly, " said outgoing chief executive Cheong Choong Keng.
"The group will need more than bold words to overcome this particular crisis, its worst ever."
Worst case scenario
Singapore Airlines warned that the first three months of its financial year, from April to June, would almost certainly be in the red.
"With little more than a month left, the first quarter will almost certainly show a loss," said the carrier.
The airline has already cut capacity by one-third and said further reductions were on the cards.
Job cuts are also planned but the group said it had no exact numbers.
"We have planned for various scenarios but the truth of the matter is that we have seen what has been shown and the trend is not encouraging," said incoming chief executive Chew Choon Seng.
Earlier on Wednesday, Singapore Air pilots rejected a management proposal to accept severe wage cuts and take unpaid leave.
The pilots want 120 overseas pilots, who are seconded to the airline, to go before they will discuss cost cutting measures.
Analysts have said the effect of Sars would be harsher on Singapore Airlines than the aftermath of the September 11 attacks.
The company itself admitted: "The outlook in the near term is dismal.
"Demand for travel has plunged due to the outbreak of Sars and to expect any significant improvement in the next two months would be unrealistic."
For the year to March 2003, the airline's net profit rose 68% to S$1.07bn ($620m; £377m). But it admitted the second half of the year had seen profits fall to just S$296m, against analysts' expectations of S$336m.