U.N. agency urges government support for airlines

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U.N. agency urges government support for airlines

MONTREAL (Reuters) =97 Governments need to do more to support airlines as=20
they slash jobs and capacity to meet a  deepening downturn in air travel=20
amid the U.S.-led war in Iraq, the International Civil Aviation=20
Organization (ICAO) warned Monday. The Montreal-based agency, created in=20
1944 to promote safe and orderly development of civil aviation, said a=20
prolonged war in Iraq would have a heavy impact on airlines, not only=20
through reduced passenger numbers, but also through  added costs as=20
airlines re-route around dangerous Middle East airspace. "If this armed=20
conflict takes more time, the negative impact on airlines will be extremely=
=20
harsh," Assad Kotaite, president of the U.N.- affiliated agency, told=20
reporters at its headquarters. Officials did not provide estimates of the=20
possible impact the war would have on airlines' bottom lines. On Saturday,=
=20
the International Air Transport Association (IATA), the industry group for=
=20
world airlines, said losses on international air travel could easily add up=
=20
to $10 billion this year as passengers postpone trips. IATA said passenger=
=20
travel could drop 15 to 20% during the war, depending on the region. The=20
global airline crisis since the Sept. 11, 2001, hijacked airliner attacks=20
against the United States has already led to estimated airline losses=20
totaling $30 billion, IATA said. ICAO's Kotaite urged governments to assist=
=20
airlines through the current turmoil. "Airlines need much more support from=
=20
the governments, and that could be in many ways," he said.

One way governments could help would be to freeze fees charged airlines for=
=20
the use of airport facilities, ICAO said, but its officials acknowledged=20
that layoffs were likely to deepen regardless of government action as=20
airlines adjust to the slowdown in travel bookings. "It is inevitable some=
=20
airlines will have to lay off," said Chris Lyle, deputy director of ICAO's=
=20
Air Transport Bureau. Airlines are already scrambling to reduce costs and=20
capacity. Five major U.S. airlines =97 American Airlines, United Airlines,=
=20
Delta Air Lines, Continental Airlines and Northwest Airlines =97 have=20
announced staff or capacity cuts. Three carriers =97 United, US Airways=
 Group=20
and Hawaiian Airlines =97 are already in bankruptcy protection. Air Canada,=
=20
the largest airline in Canada and world No. 11, announced plans last week=20
to slash 3,600 jobs, or about 9% of its workforce, and to reduce its fleet=
=20
to cut costs, saying the effects of the war in Iraq made its cost-cutting=20
drive even more urgent. The airline has not approached the Canadian=20
government for assistance, but Ottawa said late last week it would not rule=
=20
out coming to the aid of the struggling carrier.

In the meantime, ICAO said temporary routes being used by airlines to avoid=
=20
flying over the war zone and other areas of the Middle East are adding to=20
costs for aircraft, crew and fuel. Kotaite said that air traffic in the=20
Middle East region, mostly provided by European airlines, has been reduced=
=20
as some flights have been canceled. Those route changes are reflected=20
mainly in the deactivation of the northern part of Saudi Arabia, forcing=20
airlines to make detours that can add about an hour and a half to a flight,=
=20
Kotaite said. He said flights from Southeast Asia, for example, were now=20
using routes through Indian, Pakistani and Afghan airspace.


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