Wed, Mar 19, 2003 page12

• Airlines in Asia begin to cut services

  WAR NERVES Korean Air will cut 29 flights to the US and Europe, while Japan Airlines said that traffic demand fell 20 percent in the first half of this month from a year earlier

  • BLOOMBERG
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  Korean Air Co, Thai Airways International Pcl and other Asian airlines are cutting services, mapping alternative routes and asking staff to take vacation as a war in Iraq becomes increasingly likely.

  Korean Air, the nation's largest carrier, will cut 29 flights to the US and Europe, it said minutes after a speech yesterday by President George W. Bush threatening military conflict unless Saddam Hussein leaves Iraq within 48 hours. Thai Airways said it may cut flights and Qantas Airways Ltd said it's asking staff to take holidays, without elaborating.

  A war in Iraq may cause global air traffic to repeat a plunge of as much as 20 percent in the 1991 Gulf War, the International Air Transport Association has said. Rising oil prices and war concerns are hindering recovery from a slump brought on by the September 2001 terrorist attacks.

  

  A B-2 Spirit bomber from Whiteman Air Force Base, Missouri, pulls up to be refueled by a KC-135R Stratotanker from the 407th Expeditionary Air Refueling Squadron over southwest Asia in support of Operation Enduring Freedom, Friday. Air refueling crews and advanced US military aircraft have been forward deployed to the region.

  PHOTO: REUTERS

  "People aren't expecting seats to be filled," said Kum Soek-ching, who manages US$3.1 billion at Morley Fund Management (Singapore) Ltd. "A downgrade of airlines earnings will depend on how long the war may take"

  Korean Air it will reduce flights to Zurich, Chicago, San Francisco, New York and other destinations. The airline will also suspend two weekly flights to Cairo via Dubai in the event of war.

  Thai Air said it may also suspend flights to the Middle East, and it has planned five alternative routes for flights to Europe from Asia.

  Qantas, Australia's largest airline, will force more workers than earlier announced to take vacation because the risk of war has curbed travel demand.

  Airlines say flights may be directed over Russia or south of Saudi Arabia. The International Air Transport Association last month asked China for permission for carriers to fly over Tibet in case of war.

  Hong Kong's Cathay Pacific Airways Ltd rerouted its service to Rome last month, flying over Russia instead of the Middle East, said Maria Yu, a company spokeswoman. It has no plans to suspend services to the Middle East, where it has flights to Bahrain, Dubai and Riyadh.

  Rerouting flights will increase costs, analysts said.

  "Planes won't be able to fly non-stop and they would have to land at secondary airports to refuel," John Casey, an analyst at DBS Vickers Singapore Pte, said. "That's going to add costs for landing charges and more fuel."

  Eva Airways Corp (長榮航空), Taiwan's second-largest airline, estimates changing flight paths may cost as much as US$288,000 more a week, spokeswoman Katherine Ke said. The airline's flights to London, Vienna and Amsterdam as well as all cargo services to Brussels and Milan go over the Middle East.

  "There are about 20 alternative flight paths for us to choose from," Ke said. "The exact number of flights to be rerouted depends on the area the war will involve."

  Japan Airlines System Corp, the world's third-largest carrier, said traffic demand fell 20 percent in the first half of this month from a year earlier.

  "We think this is partly due to the uncertainty of war," said airline spokesman Geoff Tudor. The carrier said on March 13 it will reduce the number of weekly flights to Paris and Indonesia.

  The airline has doesn't fly to or over the Middle East, though it does have an agreement to sell seats on flights between Osaka and Dubai operated by Emirates, the largest Arab airline.

  Some airlines say they are preparing flights to evacuate their nationals from the Middle East.

  The Indian government asked Air India Ltd and Indian Airlines Ltd to prepare plans to help evacuate nationals from Kuwait, said Jitendra Bhargava, director of Air India. There are about 315,000 Indians working in Kuwait, said Anup Srivastava a director at Indian Airlines.

  Most US carriers don't fly to the Middle East, said Stephan Roth, a spokesman for the Star Alliance global airline grouping.
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