- CHICAGO (Reuters) - The 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,
the International Air Transport Association said on Saturday.
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- In the gloomiest forecast yet of the impact of the war
on the industry, the association said it expects international passenger
travel to drop 15 to 20 percent during the war, depending on the region
of the world.
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- The IATA's forecast was the latest evidence of how devastating
the outbreak of war in Iraq is for a key part of the global economy. Airlines
have already reported accumulated losses of $30 billion since the Sept.
11, 2001 attacks in the United States reduced air travel.
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- During the war, many companies have ordered employees
to only take essential business trips while tourists worldwide are canceling
or postponing air travel altogether.
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- International bookings have plunged, particularly in
the United States, where many people are choosing to stay home.
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- Airlines all over the world have been curtailing schedules,
especially international routes to and from the Middle East, and many have
had to cut jobs to stay in business.
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- BANKRUPTCIES WEIGH
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- Three U.S. airlines are already in bankruptcy protection
-- UAL Corp.'s United Airlines, US Airways Group Inc. and Hawaiian Airlines
Inc. -- while the world's largest airline, AMR Corp.'s American, is also
teetering on the brink.
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- "The people who've always relied on American to
get them to that business meeting in New York or that family reunion in
Los Angeles are instead buying no-frills tickets on the Internet or worse
still -- deciding to stay home," American Chief Executive Officer
Donald Carty told employees in Chicago on Friday. "On top of all this,
our nation has taken action against Iraq."
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- As the U.S.-led war on Iraq began this week, four of
the top six U.S. airlines -- American, United, Continental Airlines and
Northwest Airlines Corp. -- announced cuts in schedules. A host of major
airlines in Europe and Asia also have curtailed international schedules.
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- United, Northwest, Continental and Air Canada have gone
even further, imposing job cuts or temporary furloughs of employees. While
the job losses by Air Canada and Continental were not just the result of
the Iraq war, both United and Northwest cited the war as a major factor
in their respective cuts.
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- Of the top six U.S. carriers, only Delta Air Lines Inc.
and Southwest Airlines Inc. have not made cuts since the start of the war.
Spokesmen for each airline declined to comment Saturday on whether any
job- or flight-schedule cuts are planned.
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- Southwest, a low-fare carrier considered one of the most
efficient in the industry, was also the only major U.S. carrier not to
make cuts after Sept. 11, 2001.
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- MERGERS THE ANSWER?
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- Governments must help airlines tap financial markets
for cash and allow them to merge to survive the crisis, IATA Director General
Giovanni Bisingnani said on Saturday.
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- "We need the economies of scale that mergers and
acquisitions can provide," he said.
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- Many countries, especially in Europe, have national ownership
restrictions on airlines. Bisingnani said those restraints must go.
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- After Sept. 11, the U.S. government established an emergency
loan program for airlines, but has been stringent about approving the credit
guarantees. Late last year, it rejected an application from No. 2 U.S.
carrier United Airlines and the airline filed for bankruptcy protection
days later.
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- Now U.S. carriers and some members of Congress are calling
for the government to step in again to help struggling airlines cope with
the decline in business from the Iraq war.
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- Rep. James Oberstar of Minnesota, said on Friday the
airline job cuts announced this week "clearly demonstrates the need"
for Congress to approve an assistance package for airlines.
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- "We must not force the airlines to bear a disproportionate
share of the direct and indirect costs of a war with Iraq," Oberstar
said. He has proposed an airline aid bill in the House of Representatives.
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- Meanwhile, IATA said it has set up a task force to help
its 270 member airlines plan and operate their routes during war.
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