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Tuesday, 18 September, 2001, 04:48 GMT 05:48 UK
More pain for US airlines
A US Airways check-in desk
Empty check-in halls show the airlines' predicament
President George W Bush has ordered what the White House called a "comprehensive" package to support the airline industry, which is suffering a catastrophic drop in traffic in the wake of the US attacks.

No money has yet been promised the ailing industry.

Airline shares, September 17
US Airways
down 52%
down 49%
down 44%
down 42%
down 39%
But executives of major airlines are due to meet White House economic adviser Lawrence Lindsey on Tuesday to discuss what help they can expect from the federal government.

The news came as US Airways, the country's sixth-largest carrier, announced 11,000 job cuts - almost one-quarter of its workforce - and slashed its schedule by 23%.

Shares in airlines, seen as especially vulnerable to the economic fall-out from the attacks, fell by as much as half as New York markets resumed trading on Monday.

Earlier, British transatlantic carrier Virgin Atlantic said it was cutting 1,200 jobs, and Continental cut 12,000 staff and reduced its schedule by 20%.

Bail-out pleas

Over the past few days, America's airlines have become ever-more vociferous in their calls for a bail-out.

A US Airways plane in Washington
US Airways is among those appealing to Washington

Airlines are seeking $24bn in government aid, according to the Air Transport Association (ATA).

The call includes $11.2bn in loan guarantees, $7.8bn in tax relief and $5bn in cash.

According to the latest estimates, the US airline industry is losing $200m a day.

Some predict that up to 100,000 jobs could be cut over the next few weeks, adding to heavy redundancies the sector has already borne this year.

"The entire US aviation system is in jeopardy, and without decisive actions the future of the system, along with its impact on the nation's economy, is imperilled," US Airways' chairman Stephen Wolf said.

The call echoes a similar plea for state support in the UK, where airlines are heavily reliant on transatlantic trade.

Shares show the pain

The pain suffered by the sector became acutely apparent on Monday, when New York share trading restarted.

Airline pain
12,000 job losses; 20% schedule cuts
US Airways
11,000 job losses, 23% schedule cuts
1,200 job losses; 20% schedule cuts
Air Canada
20% schedule cuts
American Airlines
20% schedule cuts
American Air Trans
20% schedule cuts

Shares in all major carriers plunged - the price of shares in US Airways, which announced its job losses after the close of markets, fell by more than a half.

Other airlines performed marginally better, although are predicted to drop further in the coming days, as more bad news leaks out.

Overall, all major airlines have already cut their US schedules by an average of 20%.

ATA predicts that air traffic within and to the US could drop by as much as 60% over the next few weeks.

American Airlines, the world's biggest carrier, has said it will announce job cuts later in the week.

American Trans Air, the country's 10th-largest airline, added to the gloom by announcing a 20% reduction in schedules, and enforced leave for 1,500 of its workers.

Failures expected

Without assistance, the crisis could eventually produce some high-profile casualties in the sector.

Darryl Jenkins, director of the Aviation Institute at George Washington University, said there were five carriers on the endangered list - Continental, Northwest, America West, US Airways and AirTran.

Some or all of those carriers could be forced to seek bankruptcy protection with the next 60 days if matters take a turn for the worse, Mr Jenkins said.

The federal government has cause for concern.

Aside from their obvious logistical role in servicing US business, airlines contribute heavily to the US economy.

Airlines generated an estimated $104bn in net economic output last year.

The BBC's Elaine Parke
"Airlines worldwide have suffered a drop in bookings"
JP Morgan Chase Airlines Analyst, Chris Avery
"The airline industry is facing its toughest time ever "

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See also:

17 Sep 01 | Business
Virgin Atlantic cuts 1,200 jobs
17 Sep 01 | Business
UK airlines 'need government aid'
17 Sep 01 | Business
Airline reservations slump
14 Sep 01 | Business
Airlines bankruptcy warning
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