Terror attacks 'may have cost world's airlines €16bn'

The world's airlines may have lost a record €16bn last year, largely as a result of fall-out from the September 11 attacks.

The warning from the International Air Transport Association came as it released figures showing that passenger traffic on international scheduled services fell by 4% during 2001.

This was the first decline since the 1991 Gulf War provoked security jitters about flying.

Passenger traffic in December was down 12% on the same month in 2000, while freight traffic was 10% lower.

Iata's calculations do not include domestic travel within countries, so the true drop is likely to be higher.

US domestic travel alone accounts for up to 40% of all air travel, and that was hardest hit by the aftermath of the September 11 attacks.

Tim Goodyear, Iata spokesman in Geneva, says that despite the gloom, there is room for cautious optimism.

Mr Goodyear says the fall in December traffic was far less than the drops recorded in October and November, and industry surveys indicate that business travel is likely to pick up again.

He says: "The next few months will be critical as to whether or not our recovery timetable is applicable."

Mr Goodyear adds that it took about seven months after the Gulf War for air traffic to normalise. If that proves to be the case again, air transport traffic should start to grow again by around May.