Demand for business travel will rebound to only half the levels of the previous year by January 2002, a prominent US trade group warned on Monday.

The Business Travel Coalition, which represents corporate travel managers, forecast the steep fall in volumes having surveyed 137 corporations in the wake of the terrorist attacks of September 11. "This fall-off in premium traffic is staggering," said Kevin Mitchell, chairman of the BTC.

Declines in the number of first-class and business-class passengers have a particularly damaging impact on the airlines, as these are by far their most profitable passengers.

The BTC's estimate of a 50 per cent fall in business traffic between January 2001 and January 2002 partly reflected the fact that a slowing economy and tighter expense controls had already reduced business travel before the terrorist attacks two weeks ago.

However, 56 per cent of the companies surveyed said they expected travel levels to be below 80 per cent of the September 10 level by January, and 75 per cent expected demand would be less than 90 per cent of its pre-attack levels.

The survey was released as one airline analyst cautioned that a $15bn US government bail-out package, approved on Friday, may not avert bankruptcies in the industry.

"The aid package could be the trigger for Chapter 11 [bankruptcy] filings in situations where liquidity is questionable," said Jim Higgins of Credit Suisse First Boston.

Investors in carriers with the least liquidity, such as US Airways and America West, should "take into account the possibility of such as outcome," he added, as there were still questions about how the guaranteed loans portion of the package will be allocated.

Such concerns did not prevent battered airline stocks from recovering some of the ground they had lost last week. AMR, the parent of American Airlines, and UAL, which operates United Airlines, were up 5 per cent and 7 per cent respectively by early afternoon.

Some analysts said the longer-term outlook for shares in those airlines that survive was very promising. As airlines have reduced capacity by grounding about 20 per cent of their flights, an eventual recovery in the economy could have a "breathtaking" impact on earnings, Mr Higgins said.

However, AMR remained 36 per cent below its September 10 closing price, and UAL was 40 per cent below its valuation before the terrorist attacks.

The BTC survey also found that 12 per cent of companies were banning travel or advising their staff against travelling.

Most others are limiting air travel to essential trips, and 41 per cent said they were interested in alternatives such as video-conferencing.