By Peh Soo Hwee SINGAPORE, March 8 (Reuters) - Six months after the September 11 attacks on the United States, Singapore travel agent Alicia Seah is no longer having sleepless nights over lost business. "With a workload coming in like this, sleeping has not been too bad," said the senior manager for business development at SA (UIC) Tours, one of the city state's largest travel agencies. Seah has every reason to smile. At a travel fair in early March, the firm kept up with sales volumes seen in 2001 though it had to dangle more attractive deals as some airlines cut fares by around 20 percent. "During our travel fair promotion period, we achieved our sales target of S$10 million (US$5.5 million)," she said. "We are optimistic that the second half will pick up even better." Despite Seah's buoyant mood, Asian carriers say it is too early to pop the champagne as the gradual recovery seen in passenger traffic has been prompted mainly by cheaper fares. "There's been a slight increase. It's primarily been driven by pricing," said Stephen Thompson, Qantas Airways' (QAN) regional general manager for Southeast Asia. "I wouldn't say the market has come back completely. There's still a long way to go before we get anywhere near where we were prior to September 11." The attacks on U.S. landmarks on that day resulted in a record US$10 billion loss for major airlines in 2001. Globally, passenger and freight traffic has continued to drop in January, but less steeply than in December. Tourism is a key foreign exchange earner for most Asian countries. Airlines have responded with cheaper fares. In a promotion that ended in January, Asia's biggest capitalised carrier Singapore Airlines (SIA) (SIAL) offered fares up to 50 percent off market rates to various destinations in Asia, Europe and the United States, attracting more than 25,000 bookings. "Forward bookings are encouraging as many airlines have introduced promotional fares to help stimulate travel during the current low season," an SIA spokesman said. "We expect to see a gradual strengthening of prices to popular destinations over the next few months." SIA saw its overall load factor recovering during January in year-on-year terms after 11 months of declines. But analysts were uncertain whether the turnaround was strong enough to help it escape losses for the full year ended in March. NEGATIVE TERRITORY Richard Stirland, director-general at the Association of Asia Pacific Airlines, said while January data revealed the fall in Asian passenger traffic and revenue passenger kilometres was not as severe as after September 11, there was no upturn yet. "It picked up in December and January," he said. "The actual decline was less but we're still in negative territory." Overall, the number of passengers fell 5.6 percent in Asia in January compared with a year ago, while revenue passenger kilometres dropped about 7.5 percent. The drop was more pronounced in long haul than short haul services. Japan's two main international carriers, Japan Airlines (9201) and All Nippon Airways (9202) have said they were detecting signs of recovery in demand for international flights but have stopped short of revising full-year profit estimates. Both slashed full-year group net profit forecasts to a loss in the wake of the September 11 attacks. One of the region's smaller international carriers, Air New Zealand (AIR), said the sector faced more capacity and competition, putting pressure on fares and yields. CORPORATE TRAVEL WEAK While leisure travel is seeing some signs of a pickup, it has been tougher filling seats in first and business class cabins -- the biggest revenue generators for airlines -- as companies review the need for travel during hard times. "The leisure market reacts to price, so you can turn the leisure market round a lot more quickly than you can the corporate market," Thompson of Qantas said. "We're holding our own and doing well on the leisure side and it's just trying to restore confidence in the marketplace and getting corporates to get back." It's no small concern with carriers like Cathay Pacific Airways (0293) and SIA deriving about 40 percent of revenues from business and first class cabins, compared with about 15 percent for most other Asian airlines. Cathay posted an 87 percent plunge in 2001 net profit as a huge drop in traffic after the attacks pushed it into a second-half loss. Asia's fourth largest airline by capacity said it remained cautious on prospects for recovery as business travellers were still reluctant to fly. Thailand's national airline Thai Airways (THAI) has taken out full-page ads in Singapore's newspapers offering "Thai hospitality at unrivalled prices" on business class. A sales manager at the airline said fares had been reduced by 30-40 percent. YIELDS UNDER PRESSURE "Corporate travellers are becoming a lot more cost-conscious," said Patrick Lai, vice president of e-commerce at Abacus International, a provider of booking and ticketing systems for travel agents. "That is putting a lot of pressure on the airlines to maintain their yields." But Stirland said attractive deals were needed to eventually give yields a lift. "Only by pushing up the load factor by a combination of low fares and reducing capacity can you create the kind of pressure necessary to actually push up the yields and systematically then withdraw the discounts from the market," he said. (With additional reporting by bureaus in Hong Kong, Tokyo and Wellington)