European Airlines Face 'Worst Crisis'
By THE ASSOCIATED PRESS
Filed at 5:34 p.m. ET
BRUSSELS, Belgium (AP) -- European airlines appealed Monday for governments to help carriers survive the loss of business from the Iraq war, which the industry blamed for compounding the ``worst crisis in its history.''
The Association of European Airlines said its 30 member airlines reported a 12.3 percent drop in international passengers from March 17 to March 23, the week when the U.S.-led invasion of Iraq began.
It said the war was compounding losses from the prevailing economic downturn and the impact of the Sept. 11, 2001, terror attacks.
``Our industry is facing the worst crisis in its history,'' said Ulrich Schulte-Strathaus, secretary general of the Association of European Airlines.
Schulte-Strathaus appealed for European governments specifically to help cover the cost of extra security measures and higher insurance premiums.
European Union nations on Friday agreed to loosen competition rules that normally oblige airlines to surrender the slots for their least-used routes to rival airlines. Airlines argued the practice was unfairly punishing airlines that wanted to halt some routes during the war, but didn't want to end the routes permanently.
However EU transport ministers rejected any wider bailout of the industry, for now.
The Association of European Airlines estimates the Iraq war could add $2.5 billion to its members' losses.
Meanwhile Monday, Lufthansa said it is in talks to reduce hours for 13,500 flight attendants as the German airline seeks to cut costs.
Lufthansa and employee representatives are looking at ways to cut personnel costs under German labor law or the airline's contract, spokeswoman Christine Ritz said.
``We are checking every possibility for overcoming the (war) crisis,'' she said.
Lufthansa has already cut costs and passenger capacity since the Sept. 11, 2001 attacks made passenger demand fall. The airline credits those moves for a 717 million euro ($760 million) profit last year, but warns that the crisis in the airline industry is far from over.
Lufthansa could use German law, which permits cuts in worker hours when there is 10 percent less work for at least 30 percent of workers. The government then pays compensation to the workers.
Alternatively, a crisis clause in the airline's collective contract allows cutting the work week from 37.5 hours to 36 hours without compensation. |
