Hong Kong Aircraft Engineering Co (Haeco) said slower air traffic and tighter cost controls by airlines in the first half of this year resulted in a 21.8 per cent year-on-year decline in attributable profit to $140.4 million. The company also warned that things would get worse in the near term. Revenue fell 9 per cent from a year ago to $972.1 million. 'The cyclical consequences of the [economic turmoil] on the aircraft maintenance industry have yet to be fully seen,' chairman David Turnbull said. 'Escalating pressure on revenue and operating costs at the new airport will make the balance of the year extremely difficult,' he predicted, 'and it is likely that the downward trend in profitability will continue.' John Hetherington of Paribas Capital Markets said Haeco was under pressure from shareholder Cathay Pacific Airways. But Mr Hetherington was more positive about second-half prospects because of the increased capacity at Chek Lap Kok Airport. 'As for a rebound in the aircraft business, it will depend on the Asian market and passengers coming in and out of Hong Kong,' he said. In the first half, Mr Turnbull said the number of aircraft handled at Kai Tak decreased 2 per cent from the year-ago period. He also said contributions from associated companies - Taikoo (Xiamen) Aircraft Engineering and Hong Kong Aero Engine Services (Haesl) - improved only marginally. Moreover, even though Haesl made a positive contribution in the first-half results, the company's workload was below that of last year, he said. Haeco's earnings per share in the first half amounted to 76 cents, down from 97 cents a year ago. The board recommended a 22 cent interim dividend, down from 26 cents last year.