Cathay Pacific Airways, traditionally one of the world's most profitable carriers, is bracing for a bleak new year, according to director of corporate development Tony Tyler. Some historically high-profit routes are running at a loss and more planes will be grounded from next month to cut costs. For the first time, sales staff are offering discounts on first and business-class fares - the bread and butter of an airline known for its premium product. 'The first quarter of next year will be very worrying,' Mr Tyler said. Revenue passenger kilometres - the aggregate number of kilometres flown by passengers - fell year on year by 18 per cent in October. But what is becoming even more worrying is that routes on which the airline could always depend for profit, such as those to Japan and North America, have been worst hit by the global downturn. Kilometres to North Asia - including Japan, Taiwan and South Korea - in October registered a surprise 20.6 per cent year-on-year drop, sliding further from a 10.7 per cent fall in September. 'Japan, an important market for all airlines in the region, has shown itself to be very weak. The Japanese are just not travelling,' Mr Tyler said. Services across the Pacific to North America, which include a small contribution from South Africa, have suffered an average drop of nearly 18 per cent in year-on-year revenue passenger kilometres for two consecutive months. 'We are losing money on services across the Pacific, you don't need to be a rocket scientist to figure that out,' Mr Tyler said. Still, a 25 per cent reduction in capacity on transpacific routes has helped load factors - the percentage of seats sold - on those services recover to about 70 per cent for the week ending November 19. Overall though, loads have fallen to the 65 to 66 per cent range, Mr Tyler said, slightly below what analysts estimate is its current break-even point of about 67 to 68 per cent. 'Overall passenger levels have gone back to what they were in the early '90s. But keep in mind, we only had 40-something aircraft back then,' he said. The airline operated with 68 aircraft at the end of last year. Cathay had already reduced services by about 8 per cent and grounded one older freighter aircraft, a Boeing 747-200. To further increase loads - and raise its operating efficiency - Mr Tyler said the airline would ground another freighter of the same type in the new year, along with four other passenger aircraft of various types. Yet while loads increase, profit margins - or yield, in airline parlance - continue to fall as travellers either stay away from commercial air travel altogether, or buy cheaper economy-class tickets. For the first time, Cathay has joined other airlines in discounting premium-class fares to attract passengers for the two front-end cabins. While the airline would not release data on the extent of the discounting, Mr Tyler said the sale was not as extensive as the half-price first and business-class offerings from United Airlines. 'We have instructed our sales people to be much more aggressive in dealing with corporate accounts and letting them be much more flexible,' he said. Still, Mr Tyler said the airline 'believes in its projections that it can get through the next 12 months without laying staff off'. It would also continue to invest in upgrading its front-end cabins and airport lounges. 'We've got to remember that this is a cyclical business that will bounce back. We want to be ready with crew and product when it does,' he said.