Airlines may have lost $15B
Advertiser News Services
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 yesterday.
The International Air Transport Industry Association 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," said Goodyear. He said 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 would likely 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 around May, 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.
AMR, parent of American Airlines, the world's biggest, posted a record loss of $1.76 billion for 2001. United Airlines' parent company lost $2.1 billion, a record for any airline, and Delta Air Lines lost $1.2 billion.
Goodyear said the speed with which carriers had acted quickly to cut costs — laying off tens of thousands of workers and grounding planes — should help limit losses.
Yesterday, airlines began reporting January passenger traffic. Delta Air Lines Inc. said miles flown by paying passengers fell 9.8 percent in January from a year earlier, while East Coast rival US Airways Group Inc. said its traffic dropped 19.5 percent. Northwest Airlines Corp.'s decline was 12.6 percent.
Delta, the third-largest U.S. carrier, reduced January seat and flight capacity 12.1 percent, while capacity was down 14.8 percent at No. 4 Northwest and 19.3 percent at No. 6 US Airways because of lower demand after the Sept. 11 terrorist attacks.
American Airlines, the biggest carrier, said last week that January traffic fell 15.6 percent on a capacity decrease of 17.8 percent. UAL Corp.'s United Airlines, the second largest, said yesterday traffic last month declined 15.9 percent on a 19.7 percent cut in capacity.
