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Airlines See Threat To Recovery If US Attacks Iraq
GENEVA (AP) -- U.S. threats to invade Iraq have cast a new cloud over international airlines still recovering from more than $20 billion in losses due to the Sept. 11 attacks, an International Air Transport Association spokesman said Wednesday.
There''s a bit of doom and gloom, especially on the U.S. side and with the Latin Americans and in many ways in the Middle East, said IATA chief spokesman William Gaillard.
If something happens in Iraq, then everyone will be back to Square One, Gaillard told The Associated Press.
IATA''s advisory Financial Committee, consisting of 25 chief financial officers from leading airlines, Wednesday opened its semiannual meeting in Geneva to review the industry''s situation.
Last week IATA predicted that its 275 member airlines will take until 2004 to break even worldwide after the disastrous losses of the past year.
That''s with all things remaining equal - that is, no major crisis, for example, over Iraq, Gaillard said. That could throw a monkey wrench into the whole machinery.
He said major airlines were making preparations in case of an Iraqi crisis. Companies are buying future contracts for fuel to guarantee a price in the event that war-related shortages should drive up costs.
They look at where the fleet can be flexible, which destinations can be cut, where to shift capacity, all kinds of things you have to do.
IATA says the industry had lost $18 billion worldwide by the end of 2001, of which $12 billion was on international scheduled services.
As far as 2002 is concerned we are talking about $4-6 billion losses in international scheduled services plus an unspecified number for the U.S. domestic services that could be quite heavy, Gaillard said.
Gaillard said the current situation differs from one airline to another.
People are quite upbeat in Asia-Pacific, with the exception of Japan, he said. The continental European airlines are also seeing the light at the end of the tunnel, but people relying on the U.S. traffic - especially trans-Pacific, trans-Atlantic, even the Latin Americans, are not doing well.
In Europe, airlines that are least dependent on trans-Atlantic business are doing best, he said. That means Iberia , Air France and to a certain extent Lufthansa , SAS and KLM .
Even though European airlines have recovered, IATA is still showing that traffic on the Continent is lower than last year because of the collapses of major carriers in Switzerland and Belgium.
In Asia we''ve seen some very strong figures in China, some airports showing double-digit growth, some strong figures for Korea outbound traffic - Koreans going abroad, either for leisure or for business.
However, Gaillard said, we feel that for 2002 international scheduled traffic will still be down about 3%, but we should be back to the levels before Sept. 11 in 2003.
An invasion of Iraq could be especially hard on airlines that have yet to recover from Sept. 11, he added.
A number of our airlines, especially in the U.S., are very much weakened, Gaillard said. We''ve seen U.S. Airways going into Chapter 11 protection and United talking about it. Imagine if we have another crisis.
GENEVA (AP) -- U.S. threats to invade Iraq have cast a new cloud over international airlines still recovering from more than $20 billion in losses due to the Sept. 11 attacks, an International Air Transport Association spokesman said Wednesday.
There''s a bit of doom and gloom, especially on the U.S. side and with the Latin Americans and in many ways in the Middle East, said IATA chief spokesman William Gaillard.
If something happens in Iraq, then everyone will be back to Square One, Gaillard told The Associated Press.
IATA''s advisory Financial Committee, consisting of 25 chief financial officers from leading airlines, Wednesday opened its semiannual meeting in Geneva to review the industry''s situation.
Last week IATA predicted that its 275 member airlines will take until 2004 to break even worldwide after the disastrous losses of the past year.
That''s with all things remaining equal - that is, no major crisis, for example, over Iraq, Gaillard said. That could throw a monkey wrench into the whole machinery.
He said major airlines were making preparations in case of an Iraqi crisis. Companies are buying future contracts for fuel to guarantee a price in the event that war-related shortages should drive up costs.
They look at where the fleet can be flexible, which destinations can be cut, where to shift capacity, all kinds of things you have to do.
IATA says the industry had lost $18 billion worldwide by the end of 2001, of which $12 billion was on international scheduled services.
As far as 2002 is concerned we are talking about $4-6 billion losses in international scheduled services plus an unspecified number for the U.S. domestic services that could be quite heavy, Gaillard said.
Gaillard said the current situation differs from one airline to another.
People are quite upbeat in Asia-Pacific, with the exception of Japan, he said. The continental European airlines are also seeing the light at the end of the tunnel, but people relying on the U.S. traffic - especially trans-Pacific, trans-Atlantic, even the Latin Americans, are not doing well.
In Europe, airlines that are least dependent on trans-Atlantic business are doing best, he said. That means Iberia , Air France and to a certain extent Lufthansa , SAS and KLM .
Even though European airlines have recovered, IATA is still showing that traffic on the Continent is lower than last year because of the collapses of major carriers in Switzerland and Belgium.
In Asia we''ve seen some very strong figures in China, some airports showing double-digit growth, some strong figures for Korea outbound traffic - Koreans going abroad, either for leisure or for business.
However, Gaillard said, we feel that for 2002 international scheduled traffic will still be down about 3%, but we should be back to the levels before Sept. 11 in 2003.
An invasion of Iraq could be especially hard on airlines that have yet to recover from Sept. 11, he added.
A number of our airlines, especially in the U.S., are very much weakened, Gaillard said. We''ve seen U.S. Airways going into Chapter 11 protection and United talking about it. Imagine if we have another crisis.
