20 Percent Drop In Bookings

Domestic and international travel on U.S. airlines is off sharply because of the Iraq war with the industry cutting more than 10,000 jobs in the past week, according to the Air Transport Association (ATA). 

ATA executives said domestic bookings are down 20 percent when looking out over the next 60 to 90 days. International bookings are down more than 40 percent in some regions. James May, the group’s president, also said in a conference call with reporters that airlines have eliminated 10,000 jobs since the past week, and remains on track to cut 70,000 positions if the U.S.-led military action lasts at least 90 days.

The Flow Of Red Ink Worsens

Losses over that period could reach $4 billion, the group reaffirmed. May said the industry is coming to a point where the sustained decline in travel and rising fixed costs, like labor and fuel expenses, could push more financially fragile carriers into bankruptcy.

“Given the economic circumstances of the industry, it is not that far down the road,” May said. United Airlines and US Airways are both in bankruptcy and American Airlines may take that step in the coming weeks and months.

More Help From Washington?

The industry wants government help to offset losses related to war. But Congress and the Bush administration have not reached any consensus on any assistance package. Ted Stevens (R-AK), chairman of the Senate Appropriations Committee, said on Wednesday he was ready to offer an airline aid proposal next week in an emergency spending bill covering war-related expenses. Stevens did not detail his plan, but lawmakers have shown increasing interest lately in providing airlines with relief from some aviation security costs as well as help with meeting high-risk insurance expenses.

“We have been heartened by a number of public comments from both sides of the aisle and both sides of the hill,” May said. “But I don’t think we can say we have any agreement that anything is going to happen yet.”

FMI: www.air-transport.org