Oct. 22 (Bloomberg) -- Merrill Lynch & Co., UBS AG and JPMorgan & Chase Co. are telling senior bankers in Asia to fly coach on short-haul flights and reduce non-essential travel as they step up cost cuts, officials at the firms said.

UBS advised bankers this month to travel economy class for flights of up to five hours, two officials at the biggest Swiss bank said, asking not to be identified because it's an internal policy. Merrill employees have been told to travel economy for flights of as much as three hours since mid-September, two executives at the firm said.

The world's largest banks and securities firms are trimming costs to survive the credit-market meltdown that toppled Lehman Brothers Holdings Inc. and forced Merrill Lynch to sell itself to Bank of America Corp. The financial-services industry has cut more than 140,000 jobs since a surge in subprime mortgage delinquencies began to roil global debt markets in 2007.

``Investment banking has almost disappeared in this market, and with revenue shrinking severely, it's sensible to cut every single type of cost they can,'' said Renault Kam, a senior portfolio manager at Atlantis Investment Management in Hong Kong, which oversees $5 billion. ``We haven't seen the worst yet.''

JPMorgan, the biggest U.S. bank, has requested senior bankers fly economy on flights of less than three hours since late August, said an official who declined to be identified.

Fly Cheaper, Less

Royal Bank of Scotland Plc, which ceded majority control to the U.K. government this month, in an Oct. 16 memo asked workers worldwide to fly economy on regional routes and to cut back on travel, said an RBS banker who's seen the document. RBS spokeswoman Hui Yukmin declined to comment.

HSBC Holdings Plc's Asia unit asked its Hong Kong department heads and branch managers to cut travel expenses by 15 percent to 20 percent next year, two officials at the bank said, citing a Sept. 23 memo sent by Chief Operating Officer Jon Addis.

HSBC is recommending China Eastern Airlines Corp., the country's third-biggest carrier, over Hong Kong Dragon Airlines Ltd. for business trips to Shanghai, the memo said, according to the people. Europe's biggest bank by market value cut 1,100 jobs at its global banking and markets division last month.

A round-trip business class ticket from Hong Kong to Shanghai with Dragonair costs HK$6,110 ($788) excluding tax, almost double the best coach fare. An economy class traveler on China Eastern pays HK$2,650.

`Hard Times'

Airlines are feeling the pinch. Cathay Pacific Airways Ltd., Dragonair's parent, on Oct. 13 reported the first drop in traffic in 20 months and said demand out of Hong Kong ``slowed significantly'' as the credit crisis damped business travel. Singapore Airlines Ltd., the world's biggest carrier by market value, also recorded declines in traffic.

Mergers and acquisitions worldwide have fallen 30 percent to $2.43 trillion this year from the same period in 2007, according to data compiled by Bloomberg. Global equity offerings fared even worse, slumping by half to $292 billion.

Pain from the worst U.S. financial crisis since the Great Depression is spreading into Asia as stocks tumble and companies cancel acquisitions, stake sales and equity offerings. Citic Securities Co., the biggest underwriter of Chinese stock sales, plans to cut salaries by an average 15 percent.

``The possible global economic slump as a result of the worsening financial environment is telling us that the hard times for investment banks have arrived,'' the firm said in an internal memo obtained by Bloomberg News. ``We should make sufficient mental preparation for this.''

Merrill Job Cuts

Samsung Electronics Co., the world's second-largest chipmaker, today scrapped a $5.85 billion unsolicited bid for SanDisk Corp.

This month, Ping An Insurance (Group) Co. ended an agreement to buy Fortis's asset-management arm and Huawei Technologies Co. canceled plans to sell a stake in its handset unit. Hong Kong's PCCW Ltd. shelved a plan last week to sell a stake in its main unit because offers fell short of expectations. UBS advised the Hong Kong telecommunication company on the sale. JPMorgan advised Samsung and Ping An on their transactions.

UBS was forced into a $59.2 billion government bailout last week and Merrill, following its emergency sale to Bank of America last month, plans to cut about 500 jobs in its trading division, three people with knowledge of the plan said on Oct. 21. About 75 of those positions will be in Asia, said a bank official who declined to be identified.

``UBS always seeks to control its costs,'' said Chris Cockerill, a Hong Kong-based spokesman at the firm. ``In the current financial environment we are reviewing all potential areas where greater savings can be made, and travel is one of them.'' He declined to elaborate.

Rob Stewart, a Hong Kong-based spokesman at Merrill, declined to comment.

London-based HSBC has asked bankers to use video conferencing to replace business trips when possible. Travelers for corporate training or internal meetings are required to book economy seats, spokesman Gareth Hewett said.

To contact the reporter on this story: Cathy Chan in Hong Kong at kchan14@bloomberg.net

Last Updated: October 22, 2008 04:52 EDT