Asian airlines, already facing a worldwide downturn in passenger travel, should brace for a fall of as much as 20 per cent in their cargo revenues by the middle of next year, according to one of the region's leading aviation executives.

David Turnbull, newly appointed chairman of Seabury Asia and former chairman of Cathay Pacific, forecast a sharp drop in air cargo revenues after the Christmas holiday season. Asia is home to some of the world's largest air freight operators.

"For all the big Asian carriers, you have got to remember that there is now a hefty cargo element ... I expect that after this Christmas rush, when the latest Barbie doll and iPod has actually been shipped to the shops, freight could really go down early next year," he said in an interview with the Financial Times.

US-based Seabury is an investment banking and advisory group that has participated in 10 of the 12 largest airline rescues of the past 15 years, including that of Northwest Airlines last year.

In the three months to the end of September, air cargo tonnage out of Asia fell about 5 per cent from a year ago, according to industry estimates. Korean Air, the world's largest air cargo carrier, reported this month its biggest quarterly loss in 14 years.

Cathay, which derives about 30 per cent of revenues from cargo, also recently issued its second profit warning of the year, saying that demand has fallen across the board. For its cargo business, the Hong Kong carrier warned that "continued declines are expected for the remainder of 2008, reflecting increased competition, overcapacity and, to a lesser extent, adverse currency movements".

However, Mr. Turnbull said that Asia's leading airlines had sufficiently solid balance sheets to weather a prolonged downturn, with governments almost certain to rescue any national carrier facing collapse.

China Eastern Airlines and China Southern Airlines, two of the country's three largest state-run carriers, recently applied for emergency government subsidies, after industry-wide losses in the first 10 months of the year totalled Rmb4.2bn ($615m).

"Airlines in this part of the world have formidable backing and are unlikely to go under," he said. "You can be sure that Asian governments would bail out their airlines and not allow their flagship carriers to disappear."

Mr. Turnbull said the downturn was likely to prompt domestic consolidation in countries such as Thailand, although cross-border deals still faced considerable political and regulatory hurdles. In spite of recent efforts by Air China to acquire China Eastern, he also predicted that Beijing would strive to keep three big airlines.