U.S. airlines - already hurt by the economic slowdown and skyrocketing fuel prices - may have to scale back their lucrative foreign flights because of growing public concern about overseas travel in the midst of the Persian Gulf war.
The revenue loss from curtailment of these services will come at a time when the chaotic airline industry is experiencing big losses, declining revenue, falling domestic traffic and consolidations and bankruptcies.In the overseas market, the most affected sectors are the transatlantic routes where the competition is also the most severe.
Several airlines have already stopped flying to many Middle East locations because of the drastic jump in insurance rates and the growing instability in the region.
Trans World Airlines Inc. of Mt. Kisco, N.Y., said it plans to cut about 50 percent of its international flights beginning Tuesday because of the decline in demand for overseas travel. TWA also said that as a result of its decision, it will lay off up to 2,500 of its employees.
American Airlines, the largest domestic airline, also is reviewing the situation.
"We saw international traffic begin to fall off a few days before January 15th, the (U.N.-imposed) deadline (for Iraq to withdraw its troops from Kuwait)," said John Hotard, spokesman for Fort Worth, Texas-based American. "It became noticeable with more no-shows and cancellations."
American Airlines, which reported a fourth-quarter loss of $215 million, its largest single-quarter loss ever, has in recent years moved to become a major international carrier with overseas flights accounting for 20 percent of its traffic.