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Mon, May 12, 2003 - Page 12 News List

Business leaders to discuss methods of rescuing air travel

NO RELIEF The tourism industry and airlines are reeling from blow after blow, and nowhere have they been harder hit than in the Asian-Pacific region


The world travel industry, which was still reeling from the security fears sparked by the Sept. 11 terrorist attacks and the Iraq war when the deadly SARS virus delivered another punch, will gather in Portugal later this week to discuss the crisis pounding the sector.

Over 60 speakers from around the world, including a number of presidents of major airlines and hotel chains, are expected to flock to the southern seaside resort of Vilamoura on Thursday to attend a two-day conference organized by the World Travel and Tourism Council (WTTC), a grouping of travel industry chiefs.

It will be the first major global meeting of tourism heads since the outbreak of SARS -- which has claimed more than 500 lives in about 30 countries -- led to a sharp fall in hotel bookings and flight cancelations around the world.

"I can't remember when the travel and tourism sector has faced so many challenges," said Alex Kyriakidis, the head of travel, tourism and leisure at consultancy Deloitte and Touche who will take part in the conference.

While tour operators had hoped a quick end to the war in Iraq would lead to a release of pent-up travel demand, recent industry figures suggest the appearance of SARS has given travellers a new reason to stay put.

International travel reservations group Amadeus said last week worldwide bookings had fallen by 16 percent in the first three weeks of April compared to the same time last year because of concerns over the spread of the virus.

Bookings for destinations in Asia, the region worst affected by SARS, had fallen 60 percent according to the Madrid-based firm, which runs the world's second largest travel reservation system.

Airline industry group International Air Travel Association, which brings together some 280 airlines representing more than 95 percent of international air traffic, has said fear of travel will cause the deeply troubled industry to lose about US$10 billion this year.

Airlines in Asia have been especially hard-hit. Hong Kong's Cathay Pacific Airways' passenger numbers are down about 75 percent from the same period last year, while the number of flights has been cut by about 45 percent.

Singapore Airlines, the most profitable airline in the region, has reduced its flights by 20 percent while Australian flag carrier Qantas is due to sack 1,400 personnel by next month because of cuts in flights.

The industry has so far reacted to the crisis by slashing prices in a bid to tempt travellers back onto planes and into hotel rooms.

Vietnam Airlines has cut ticket prices by as much as 75 percent for tourists heading to and from Vietnam from Australia, France, Japan and South Korea to try to pump vitality into summer vacation travel bookings.

The offer, which was prepared in cooperation with the nation's national tourist board, lasts until the end of July.

But even though the World Health Organization has said Vietnam has gotten its SARS outbreak under control, government officials in Hanoi do not expect a full recovery in passenger arrivals until the next high season in November.

Germany's TUI meanwhile, the world's biggest tourism group, launched a new low-cost tour operator on Friday called Discount Travel which will offer reductions of up to 40 percent on packages that TUI's other operators are unable to move.

But industry analysts warn the travel and tourism sector, which accounts for over 200 million jobs and over 10 percent of global output according to the WTTC, will need to do more than cut prices to survive the current crises.

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