Airlines can expect brighter skies next year despite the current woes that have engulfed the industry in the wake of the attacks on the US, according to the chief of a global airlines association.
Pierre Jeanniot,director-general of the International Air Transport Association (IATA), said in a statement released on Tuesday that the global airline industry would recover by September 2002 and the US-led strikes against Afghanistan likely wouldn't exacerbate the industries' problems.
"I am very confident that our industry will weather the storm. It will emerge, bruised but reformed and very much strengthened," Jeanniot said.
Jeanniot, whose organization represents 275 airlines around the world, said the upbeat recovery forecast was based on the assumption of a successful military campaign in Afghanistan, a rapid global economic recovery and restored consumer confidence.
Airlines will recover along a path similar to that seen after the Persian Gulf War in 1991, when airlines took about 11 months to regain their original growth rate after a dip of about 25 percent at the onset of the fighting, he said.
US securities firm Merill Lynch in a recent market report also predicted that passenger numbers -- which it says have fallen by 40 percent to 50 percent -- would eventually return to levels seen between 1999 and 2000, but that it could take several years.
The report said that the US-led military action in the Middle East "would likely forestall a return to more normal traffic levels."
Jeanniot, who delivered a speech at the Hong Kong International Aerospace Forum on Tuesday, painted a grim picture of the damage wreaked among the airline industry since Sept. 11 saying potential annual losses would shoot to US$7 billion, up from US$2.5 billion before the attacks.
Jeanniot also pointed to the high number of layoffs in the global industry since the attacks, putting the number of those put out of work in the airline industry at 120,000.
Taiwan's major carriers China Airlines Co (華航) and EVA Airways Corp (長榮航空) have already cut the frequency of flights around the world. EVA has already announced plans for layoffs while China Airlines is still considering the option.
Jeanniot said it might be necessary for governments to continue helping airlines with insurance coverage for a few months more until things settled down.
But he said he had no doubt that the long-term costs of airline insurance would rise.
Jeanniot repeated earlier calls for governments to improve the sharing of criminal intelligence data to prevent a repeat of the US tragedy. He said IATA was testing techniques like computerized recognition of the human iris to both improve and speed up security checks.
Boeing Co Chairman Phil Condit gave a bleaker assessment of the sector's outlook last week, saying the drop in traffic could be five to 10 times worse than that during the Gulf War.
In an interview with CNBC television, Condit said more major airline bankruptcies were possible in the US in the next 30 to 60 days.
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