Reprinted with permission of the The Herald (Glasgow)

Airlines seek help to weather crisis

By David Steele
Copyright 2001  Scottish Media Newspapers Ltd.
Article date: September 19, 2001
 

Executives from British Airways, Virgin Atlantic, and bmi British Midland yesterday presented Stephen Byers, the transport secretary, with a list of measures they want to see implemented in the wake of the terrorist attacks in America.

The meeting came as tourism chiefs warned that mass cancellations by travellers following the atrocity may send the global tourism business into its worst crisis ever.

Airline chiefs urged Mr Byers to ensure a level playing field with their competitors, including the abolition of UK airport tax and high fuel tax.

Virgin axed 1200 jobs earlier this week and cut services to the US and Canada in anticipation of expected reductions in demand for flights in the wake of the attacks. Unions fear BA will announce redundancies in the next few days. The crisis facing the industry was highlighted late last night when it was revealed that Boeing, the US airline manufacturing giant, was planning to lay off 31,000 people in the wake of the attacks.

Sir Richard Branson, chairman of Virgin, said yesterday: "We want to talk to the government to make sure there is a level playing field between American and British carriers in the future, and we want to talk about security measures and make absolutely certain passengers can feel comfortable about flying again."

Rod Eddington, chief executive of BA, said last night that the problems of his airline would become clearer later in the week.

He said: "We'll be looking at capacity on the north Atlantic and the rest of the routes network. When we've got some clarity on that, we will be working with our people to ensure we adjust our people numbers appropriately."

Mr Byers has promised to set up a committee immediately to examine the issues.

Mr Eddington said the airlines had not requested financial help from the government.

"We only asked that a working group was set up so that as we get clarity with what other governments are doing and what the impact on our business is, we have an opportunity to discuss it with the government," he said.

On enhanced security, Mr Eddington said he could not rule in or out having armed security guards on all flights.

However, he said measures already taken to boost security included improved hand baggage checks and special arrangements for transferring bags and passengers around airports.

Ireland's Aer Lingus national airline is to cut its operations by 25%, removing seven aircraft, including two transatlantic jumbo jets, from its fleet. The cutbacks, which will lead to the loss of more than 600 non-permanent staff, will see the withdrawal of services to Washington and Newark from next month. In addition, there will be a reduction in the number of flights to Britain and other European destinations.

Ryanair, which operates a network of services, including four destinations from Glasgow Prestwick, remained upbeat yesterday about the effects on its business.

Michael O'Leary, chief executive, said: "The immediate impact of last week's events upon Ryanair were limited. We cancelled only 16 out of 1800 flights over the past seven days."

Travel agents around the world called the attacks "catastrophic" for the (pounds) 314bn-a-year business, and said the crisis could surpass the worst previous blow to the industry, which was the Gulf war in 1991.

Graham Miller, a tourism lecturer at the University of Westminster in London, said: "Tourism is the world's number one industry, and the services are reliant on people's safety and security, which have been threatened by this event."

Francesco Frangialli, secretary-general of the World Tourism Organisation, called the attacks a "terrible blow" but he predicted a quick recovery.

One of Italy's largest tour operators for the United States, the Genoa-based Kuoni Gastaldi, said hundreds of US tours had already been cancelled.

Tourism is the lifeblood for many countries, especially less developed nations that have no other major industries.

Sean Tipton, spokesman for the Association of British Travel Agents, said: "There is no question about it, the events of last week are having a devastating effect on tourism across the world.

"So far as outbound tourism from the USA into the UK is concerned, it is down by around 75% and there is no indication of an improvement in the short to medium term.

"Our members have been hearing in large numbers from people who are concerned about travelling, particularly by air and especially to North America.

"We have been passing on the advice of the Foreign Office, which is that it is safe to travel to the United States and Canada as things stand at the moment."

Meanwhile, insurance premiums for the aviation industry could increase by as much as 400% following last Tuesday's terrorist strike on the US, Insurance group Amlin has predicted.

The group, a leading Lloyd's insurer, said there were likely to be triple-digit increases in premiums for airlines of around 200%, and as much as 400% in some cases.
 

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