Airlines around the world cut routes and frequencies last week after the outbreak of war in Iraq. Flights to destinations including Amman, Beirut, Cairo, Damascus, Kuwait City and Tel Aviv were suspended temporarily or until further notice by Air France, British Airways, KLM, Lufthansa and other Asian, European and Middle Eastern carriers.
The effects of the conflict are extending well beyond the Middle East. US carrier Continental has cut some transatlantic and transpacific flights, in anticipation of a forecast 8% drop in total US passenger traffic this year. American Airlines is cutting capacity on its international network by 6%.
Several carriers will permit passengers to change travel plans - Continental, Delta and others are allowing free changes or even refunds on domestic and international tickets.
The International Civil Aviation Organisation has redirected flights through the region on to new routes well clear of Iraq, but the alternative routes are longer and will lead to higher fuel costs, says Singapore Airlines. Oil prices fell sharply after the start of hostilities, down to a three-month low on 20 March of $25.50 a barrel, but started to climb again later the same day. Although the Organisation of Petroleum Exporting Countries has promised to increase production to make up for any destroyed oil wells, sabotage or attacks on oilfields could drive prices up.
Airlines could also face higher insurance costs as insurers are likely to raise premiums on flights into the Middle East.
The airline industry is in far worse condition now than when it faced the last Iraq war in 1991. The USAir Transport Association forecasts traffic 8% down and losses of $10.7 billion in 2003 for its members, which include most US airlines.
Source: Flight International
