Travel firms stare at 70% cancellations

NEW DELHI: After the stockmarkets, both the airline and tourism industries are likely to be the chief economic casualties of a US-led war with Iraq. This is evident from the fact that today travel agents reported a 10% cancellation in bookings for outbound travel.

And, they expect this figure to rise to more than 70%.

According to an airline official, the war with Iraq is coming at an inopportune moment for airlines, most of which are still recovering from the global downturn in air travel following 9/11. The extent of a new slump in air traffic would depend on the duration of the US-Iraq war. US airlines are likely to be the worst hit because Americans are sensitive to such events.

According to Amadeus India managing director Ankur Bhatia, "Several major carriers may drop some travel restrictions in the event of war."

"It is expected that flights to the Gulf may be cancelled initially, and re-routing of flights may also take place. War will give a major blow to the aviation industry, which was looking up now. Airline bookings in March have been better than the same period last year. Flights to Hong Kong, Singapore and Europe were doing 100% till now. If war breaks out, the immediate impact will be cancellation of bookings to the tune of 60-70%."

The domestic travel fraternity is expecting the inevitable: a decline in both inbound and outbound travel. But, the drop in tourist traffic will depend on the extent of military action, said Himmat Anand, COO, Sita World Travel.

"There have been cancellations for the last two days. If war breaks out, we are expecting cancellations to the tune of 90%. Business-wise, April and May look bad and we expect neutralisation of pressure only around August and September. Our bottomlines have come under severe pressure," he said.

Players — large and small — fear that the recovery process may suffer a setback. Subhash Goyal, chairman, Stic Travels said, "We are expecting immediate cancellations of 50% bookings at the onset of war. The impact of war can only be determined on the basis of the duration of war."

Not only in India, but in several other countries too, war will have a major impact on travel and tourism.

According to the latest research from the World Travel & Tourism Council, a prolonged war in Iraq would eliminate more than 3m jobs in the global travel & tourism industry and destroy more than $30,000m of economic value in '03.

...not to mention for innocent Iraqi civilians, the European Union, the UN Security Council and World Peace.

"War - what is it good for?
It's good for business..."
Billy Bragg