Terror to weigh down airlines: Industry body

Terror aftereffects would weigh down country’s ailing airline industry which might see a sharp drop in air travel, said the International Air Transport Association.

Terror aftereffects would weigh down country’s ailing airline industry which might see a sharp drop in air travel, said the International Air Transport Association (IATA) today.

The apex air travel body has predicted a major shift in performance of carriers in region’s two main growth markets — India and China. IATA chief Giovanni Bisignani said the airline industry in these two “robust emerging markets” would face “a much more substantial slowdown” in 2009, and asked the the two governments to take corrective steps. “India’s carriers, which are already struggling with high taxes and insufficient infrastructure, can expect a drop in demand following the tragic terror incidents in November,” said the IATA.

Bisignani said that governments must stop “crazy taxation, fix the infrastructure, give airlines normal commercial freedoms and effectively regulate monopoly suppliers”.

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Forecasting a rather bleak outlook for the industry, IATA said the chronic industry crisis would continue into 2009 with $2.5 billion in losses, the worst revenue environment in 50 years or since the World War II. The global industry losses forecast for 2008 calender year stood at $5 billion, a slight improvement from the earlier prediction of 5.2 billion. However, the European carriers would experience the largest increase — ten-fold — in losses to $1 billion, while airlines of the Middle East and Latin America would double their losses to $200 million each.

Commenting on the job-market scenario, Bisignani said there might be job losses by around five per cent, around 1.7 million, in the aviation industry, which employs around 32 million people worldwide. IATA has also predicted a fall of 3 per cent in passenger markets next year.

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