Terrorist attack brings more job cuts in ailing airline industry

The
airline industry has axed 200,000 jobs following the terrorist attacks on 11
September, according to a leading industry agency.

Figures
released by the International Air Transport Agency show that in the two weeks after
the World Trade Center attacks their members cut their workforces by 7 per
cent, or 120,000 people, mostly in the US.

Before
the attacks, IATA had been expecting members to record a net loss this year of
$2.5bn, the first such loss since 1993. With passenger numbers falling and
insurance premiums rising since the terrorist attacks, the agency is now
forecasting a loss of $7bn worldwide.

Pierre
Jeanniot, the director-general of IATA, which represents 275 airlines, said he
expected it to take a year for the industry recovers.

In
addition to the job cuts in the US, Air Canada is set to slash 9,000 posts and
reduce its operations by 20 per cent, grounding 84 aircraft. This follows
British Airways cutting 7,000 jobs and cancelling 190 flights a week – 9 per
cent of its overall capacity.

The
combined loss of these two companies alone is estimated at $105m, the Financial
Times reported today.

Based
on the industry’s experiences during the Gulf War – the last cause of major
airline job losses – IATA estimates it will take seven months for earnings to
return to positive territory and another four months to recover to their
long-term trend.

By Phil Boucher

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