US. The Air Transport Association (ATA) based in the US yesterday reported that the war effort is taking a heavy toll on air travel. Systemwide drops in traffic, from already depressed pre-war levels, have forced US carriers to make additional capacity cuts and eliminate more than 10,000 jobs in the first week of the war.
“As we outlined just a few weeks ago, the airline industry is in a seriously weakened state and now is beginning to buckle from the non-market blow being dealt by the war,” said Air Transport Association president and ceo James May. “The airlines have been making the tough decisions necessary to cut costs, to cope with existing market conditions. But the war in Iraq, combined with domestic terrorism threats are non-market forces putting extraordinary negative pressure on demand.”
In the week preceding the war, traffic moderated slightly, but traffic for the week ended 23 March fell -10%, led by a -25% drop on Atlantic routes, a -13% drop in the Pacific, and an -8% drop in Latin markets. Domestic traffic also fell -7%.
According to ATA advance bookings for the next 60 to 90 days suggest no relief in sight. Domestic bookings are down more than -20%, Atlantic down more than -40%, Latin America down more than -15% and Pacific more than -30%. Airlines have reported that on some days cancellations are exceeding bookings.
Two weeks ago, ATA in its report “Airlines in Crisis: The Perfect Economic Storm” outlined the impacts a war would have on the airline industry, projecting traffic would drop -15 % during the quarter in which fighting occurs. Data collected thus far are consistent with those projections.
Note: Air Transport Association of America is the trade association for leading US airlines. ATA members transport 95% of all US passenger traffic.
