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Archive for Wednesday, February 6, 2002

Terror attacks may cost airlines record $15 billion

February 6, 2002

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— The world's airlines may have lost a record $15 billion last year, largely as a result of the terrorist attacks on the United States, an industry spokesman said Tuesday.

The International Air Transport Industry Assn. reported that passenger traffic on international scheduled services fell by 4 percent in 2001, the first decline since the 1991 Gulf War caused jitters.

For the month of December, international passenger traffic was down 12 percent from the previous year and freight traffic was 10 percent lower, IATA said in its report. It gave percentages but not the overall numbers.

IATA's calculations do not include domestic travel. U.S. domestic travel, which normally accounts for between 30 percent and 40 percent of all air travel, was hit the hardest by the Sept. 11 attacks.

The decline in passenger and freight traffic could mean losses of $10 billion on international services and an additional $5 billion on domestic U.S. operations, IATA spokesman Tim Goodyear said.

"We could be talking about worldwide losses of $15 billion, which is an utter disaster," Goodyear said, noting that the amount was equal to the losses over a four-year period after the Gulf War.

Goodyear said that despite the gloom, there was room for cautious optimism. The fall in December traffic was far less than in October and November, and industry surveys indicated business travel likely would pick up again, he said.

"The next few months will be critical as to whether or not our recovery timetable is applicable," Goodyear said. It took about seven months for air traffic to return to normal after the Gulf War, and IATA believes traffic may rise again in May, he said.

"We hope this will be the case but have no way of telling at the moment that it will come about," he said.

North American airlines were hit hardest by the drop in international travel, followed by European ones. Asian carriers suffered badly on trans-Pacific routes after Sept. 11 but have rebounded, Goodyear said.

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