This article from NYTimes.com has been sent to you by psa188@juno.com. Airline Executives Discuss Impact of Possible War in Iraq February 17, 2003 By DON KIRK SEOUL, South Korea, Feb. 17 – Top executives from 15 international airlines gathered here today to welcome the newest member of their marketing alliance but spent much of their time talking both privately and publicly about the potential impact of a war against Iraq. "It’s a very difficult time," said Wallop Bhukkanasut, vice president of Thai Airways International, talking over the din of loud music and video presentations at a lavish reception hosted by Asiana Airlines, which joins the Star Alliance on March 1. "Hopefully it will be a short-term war." A war would will hit Thai Airways harder than most of the other members since the airline flies to five Persian Gulf states and would have to suspend service to all of them if fighting started. "It’s better for consumers to stay away from the war zone just to be sure it’s safe," said Mr. Bhukkanasut. "We don’t want a stray cruise missile somewhere near us." Executives of airlines that fly nowhere near the Gulf talked anxiously of declining service worldwide, the need for alternate routes, and additional "technical stops" if their planes for any reason had to be diverted hundreds or thousands of miles out of the way. "We are in contingency planning," said Juergen Weber, chief executive officer of Deutsche Lufthansa AG, talking to reporters before the reception. "Nobody knows how serious it will hit us." Mr. Weber said that bookings had gone down by 20 percent during and after the first Gulf War in late 1990 and early 1991 and predicted a similar drop-off if war breaks out again in the region. Already, he said, bookings had gone down amid rising fuel costs. Other airline executives expressed similar worries about the impact of conflict. "We’re all concerned about it,"said Mark Schwab, regional vice president for United Airlines, which also has no service to the middle east. "We have developed contingency plans. We try to forecast what might happen. It’s all very unpredictable." Such talk contrasted with the sense of exaltation surrounding the admission of Asiana, the distant second of Korea's two airlines, to an alliance that ranks a clear first among the three major airline networks with 26 percent of the world’s international passengers. After having gone through a rigorous screening process that tested everything from safety to computer systems, Asiana executives clearly viewed their membership in the group as a milestone not only for their own company but also for the Korean airline industry. Park Chan Bup, the airline president, said Asiana planes would display the logo of the Star Alliance while providing, through code-sharing on ticketing, around-the-world service. The company chairman, Park Sam Koo, suggested some of the concerns, however, while wall-to-wall screens flashed images of Star Alliance planes in flight around the room. "The cost of fuel is the problem," said Mr. Park, noting that Asiana provides no service of its own to the middle east. "We have some fears. We can manage it right now. We made a profit last year." If the war is somehow averted in Iraq, he said, the airline expects to make more than $50 million as a result of its membership in the Star Alliance. The protracted buildup toward a possible war, though, was in itself a wearing ordeal, said Robert Milton, president of Air Canada. "The North American industry in terms of domestic service remains in rough shape" in the lingering aftermath of the terrorist attacks of Sept. 11, 2001, he said. "Now we’re into another wave of stress. People are very apprehensive." Mr. Milton said that Air Canada had briefly suspended service to Tel Aviv, its only Middle East destination, during the first Gulf War after Iraqi forces fired SCUD missiles into Israel. Without such disruptions, he said, passenger service would inevitably fall off. "It’s a pretty basic instinct," he said. "You don’t want to be far from home if things go awry." Lars Lindgren, senior vice president of Scandinavian Airlines System, cited uncertainty as one of the worst problems. "Traffic was down 20 percent in the Gulf War," he said, "but it was a very short war, and we recovered fast." This time around, ":If war comes, we need to make sure we get out of it quickly," he said. "The sooner we can take this uncertainty out of the market, the better off we will all be." In the meantime, said Jaan Albrecht, chief excecutive officer of the Star Alliance, "We are coordinating scenarios, so the effect would be consolidation of routes." If the airlines have to reduce service, he said, "the idea would be to downsize in a coordinated way." http://www.nytimes.com/2003/02/17/business/worldbusiness/17CND-AIR.html?ex=1046577646&ei=1&en=59b9a5c38228ae7d HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@nytimes.com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@nytimes.com. Copyright 2002 The New York Times Company