'Indian airlines may see dip in traffic due to Mumbai attacks'

Amitabha Roychowdhury

Geneva, Dec 9 (PTI) Painting a gloomy picture for the global aviation industry for next year, the International Air Transport Association (IATA) Tuesday said Indian carriers could expect a drop in demand for air travel, particularly after the Mumbai terror attacks two weeks back.

Forecasting a "major shift" in performance of carriers
in India and China, IATA chief Giovanni Bisignani said the
airline industry in these two "robust emerging markets" would
face "a much more substantial slowdown" in 2009 and asked the
the two governments to take corrective steps to help the
ailing business.

He said India should take urgent steps to create the
Airport Economic Regulatory Authority as the legislation to
give effect to it had been passed over a month ago.

"Fighting crazy taxation regime" in various countries is
a priority for the airline industry, he said further.

The Airport Economic Regulatory Authority Bill, awaiting
the Presidential assent, empowers the authority fix tariff
structures and to ensure a level-playing field for airlines.

"The outlook is bleak. The chronic industry crisis will
continue into 2009 with USD 2.5 billion in losses. We face the
worst revenue environment in 50 years or since the IInd World
War," he said.

The global industry losses forecast for 2008 calender
year stood at USD five billion, a slight improvement from the
earlier prediction of USD 5.2 billion.

Releasing the global airline body's annual financial
forecast and reports on industry trends at the headquarters
here, Bisignani and IATA's Chief Economist Brian Pearce said
the airlines in Asia-Pacific region would see losses more than
"doubling" from USD 500 million now to USD 1.1 billion in 2009
and predicted a five percent drop in the cargo market.

"The region's largest market Japan is already in
recession. And the two main growth markets --- China and India
-- are expected to deliver a major shift in performance," IATA
economist Pearce said.

Growth in China would slow as a result of a drop in its
exports, he added.

"India's carriers, which are already struggling with
high taxes and insufficient infrastructure, can expect a drop
in demand following the tragic terror incidents (Mumbai
attacks) in November," the IATA economist said.

However, the European carriers would experience the
largest increase-- by ten-folds-- in losses to USD 1 billion,
while airlines of the Middle East and Latin America would
double their losses to USD 200 million each.

".... for governments, it's a wake up call to stop crazy
taxation, fix the infrastructure, give airlines normal
commercial freedoms and regulate monopoly suppliers,"
Bisignani said.

Bisignani said there may be job losses by around five
per cent in the aviation industry, which employs 32 million
people worldwide. That would mean a cut of over 1.7 million
jobs around the world.

Substantial numbers of jobs "are likely to be lost and
as a result, damage consumer incomes and confidence further,"
Pearce said.

The also predicted a fall of three per cent in passenger
markets next year.

The top IATA officials also released reports on the
status of global aviation infrastructure, safety and security,
environment and measures to further liberalise the sector.
PTI ARC