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Airline Recovery Prospects 'Good,' says Industry Group - 2003-08-04

The International Air Transport Association says the airline industry has turned the corner, and prospects for recovery are good. But airlines are expected to pile up billions of dollars in losses.

The International Air Transport Association said global airline traffic picked up sharply in June, but a full recovery is still some months away. IATA predicts the world's airlines will lose up to $6.5 billion this year.

It says about $4 billion of that is due to SARS, the severe acute respiratory syndrome. The rest of the losses are largely linked to the war in Iraq.

IATA Assistant Director of Corporate Affairs Nancy Gautier said airlines in the Asia-Pacific region, which was hardest hit by the SARS crisis, suffered the greatest losses. But, she noted air traffic in the region was down nearly 39 percent in June compared to 55 percent in May.

"Although they have a long way to go, they are coming right back up. It is a steep climb improvement, and we hope to see this trend continue and the signs look good. ... We are hoping that, if this progression continues, that by the end of the year, we will be able to say we are getting back to the levels where we were before all these crises began. ... We need to consider crisis as a part of everyday life," Ms. Gautier said.

Ms. Gautier said areas that were not affected by SARS did not suffer from a drop in air travel. She noted that the war in Iraq did scare travelers away, but only temporarily.

IATA figures show that Middle East traffic rose by four percent last month. Africa registered an increase of 1.1 percent in June, and air travel to South America rose by 9.3 percent this year.

However, Ms. Gautier acknowledges that tourism in general was heavily hit by SARS and the Iraqi war. "It is not just the airlines. It is hotels. It is tour operators. It is everybody who works in the area. All of that is a great backbone to our economy. And, so many countries depend on this so heavily, as you know. ... It has been a rough road for them. And, therefore, if the airlines are coming back, we hope that, in general for the industry, that they are all beginning to see that this pent up demand is beginning to be let loose again and that both leisure travelers and business travelers are getting back," she said.

Ms. Gautier said that now is a good time for travelers to take advantage of special promotions the airlines are offering to lure them back.