World airlines were hit hard by the SARS epidemic on Wednesday as several carriers cut flights, Australia's Qantas axed 1,000 jobs and global airlines body IATA warned the disease could hurt the industry more than the Iraq war.

"SARS is likely to have a significantly worse impact on the global airline industry than the war in Iraq," IATA assistant director Lasantha Subasinghe told a Tokyo conference.

The International Air Transport Association had previously forecast war in Iraq could easily add $10 billion to world airline losses and deepen what is already the worst crisis in the history of commercial aviation.

IATA warned more carriers could join the list of airline casualties unless they manage to cut costs.

Airlines around the world have slashed flights as they struggle to cope with the pressure of the deadly SARS virus on bookings already depressed by war. Asian airline shares fell around four per cent on Wednesday.

The flu-like Severe Acute Respiratory Syndrome has infected more than 2,800 people in 20 countries, as travelers who picked up the virus in Asia spread it in their own countries.

Qantas Airways Ltd, Australia's biggest airline, axed 1,000 jobs on Wednesday, three percent of its workforce, blaming the impact of SARS.

Finland's national carrier Finnair said its passenger numbers were down in March as SARS hit demand, a day after Germany's Deutsche Lufthansa AG warned of an 'unexpectedly' deep first-quarter operating loss due to a sharp fall in passenger numbers.

Asia's biggest airline Japan Airlines System Corp, All Nippon Airways, Hong Kong's Cathay Pacific Airways, Korean Air, and Indonesia's state-owned Garuda Indonesia have all cut flights because of SARS.

Qantas also plans to eliminate a further 400 permanent positions from its 35,000-strong work force through attrition and convert another 300 permanent jobs to part-time positions.

"We're seeing in the last 10 days that SARS and the amount of publicity it has got...in this region is causing more problems than the war," Qantas chief executive Geoff Dixon said.