SINGAPORE Airlines (SIA) announced a 5.8 per cent slide in net profits this week to S$801 million (about HK$3.98 billion) for the year ended March 31, continuing the Asia-wide profit slide that began with the Gulf War in 1991. This followed a 97 per cent first half profits plunge by Malaysian Airline System (MAS), a 62 per cent first half slide by All Nipon Airways and a 24 per cent year end slump by Cathay Pacific announced in March. Others have not been so lucky. Japan Air System has recently slipped into the red, while Japan Air Lines' massive losses ballooned by another 40 per cent in the first half. The list of dismal results goes on and on. The question is, when will it all end? Sooner rather than later, according to Lehman Brothers' tentatively bullish Asian Airlines Industry First Quarter 1994 Report. The report predicts passenger yields and passenger load factors will start to turn around early next year and this may translate into strong upswings in profits in the second half of 1995. It is making its predictions on the assumption that fleet deliveries will slow down by then for most Asian airlines, and that most of the major economies will be back to full health or in the process of recovery. However, the report warns that the extent of the upswing of each Asian airline will depend highly on the structure of its individual network. It expects the upswing for Cathay Pacific, for instance, to be limited by a continuing soft Japanese economy, which traditionally accounts for around 25 per cent of its business. Lehmans does not expect a sustainable recovery in the Japanese economy until 1996. SIA, on the other hand, is expected to benefit from stronger European economies as 30 per cent of its business is exposed to the Europe-Asia sector. Lehmans' predictions for Asian airlines as a whole are slightly more optimistic than those of the Orient Airlines Association (OAA), which predicts a declining yield trend for member airlines for the next two years. ''We expect passenger load factors to improve by about 0.5 per cent to one per cent,'' says Lehmans' Hong Kong-based aviation expert, Eisha Cheng. ''However, we expect that real traffic growth will still not be strong enough this year to allow for meaningful increases in real fares given continuing competition and increases in capacity by both Asian and non-Asian airlines.'' Given that Lehmans was expecting an average 11 per cent increase in seating capacity this year for the airlines it covered, Ms Cheng said she expected passenger yields per revenue passenger kilometre for most airlines to only increase slightly. The only exception she mentions is Thai International Airways, which Lehmans expects to benefit from a strong recovery in arrivals to Thailand. Thai's profits plunged 66 per cent during the year to September 30 1993, then puzzled the world by posting a staggering 817 per cent rebound for the first quarter of 1993-94, with analysts pointing to increased management efficiency. Further improvements are expected. Given that Thai's expected capacity growth of six per cent will be below the average, its yield levels should be supported. With the exception of Thai, all the other airlines covered by Lehmans (SIA, Cathay, China Airlines and MAS) have so far under-performed their respective stock market indexes this year. It attributed this to continuing signs of competition for Asian airlines and the weakness of the Japanese economy, both of which Ms Cheng expected to persist in 1994. Cathay Pacific could be the exception here. Lehmans expects it to slightly outperform the Hang Seng Index in the second and third quarters since much of the index is composed of property-related stocks, which have recently been taking a battering from negative sentiment and uncertainty over the future of Hong Kong's residential real estate market.