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Wednesday, 3 October, 2001, 17:50 GMT 18:50 UK
Passengers desert British airlines
British Airways has confirmed a dramatic fall in passenger numbers in the wake of the terror attacks on the United States.

The airline said it has lost one in three of its transatlantic passengers.

Meanwhile, the UK's second largest airline, BMI British Midland, said it was cutting 600 jobs and grounding eight aircraft.

The world's airlines have been under huge pressure since 11 September, with people's reluctance to fly adding to the financial trouble many were already in.

Click here to see a five-year graph of BA's share price

Swissair rescue

The Swiss government has thrown collapsed carrier Swissair a 288m lifeline so it can resume flights until the end of the month.

Swissair's entire fleet has been grounded since Tuesday, leaving more than 30,000 passengers stranded, after it admitted it had run out of money.

The airline says it hopes to resume a limited service on Thursday.

Meanwhile, Belgian airline Sabena, part-owned by Swissair, filed for bankruptcy on Wednesday.

Job losses

Since the attacks, more than 100,000 job losses have been announced by airlines.

BA itself lost 48m in revenue in the two weeks following the attack, and has already taken action to cut costs.

Last week it announced plans to shed 7,000 jobs, and withdrew or suspended 190 of its services, including some transatlantic routes.

BA said traffic was down 36% in the seven days following the attacks on the US, before recovering to be 28% down in the last week of September.

But the many in the City had expected worse news from BA and the airlines shares were up about 5% at the close on Wednesday.

Business travel

BA said business travel had been the area worst affected by the attacks because many companies had introduced travel restrictions on employees.

However, it said it expected this sector to recover faster "as any perceived risks are better understood."

In a statement BA said: "Forward bookings for October are indicating that traffic for that month will be down by around 25-30% versus last year, with capacity down at least 15%.

"Costs for insurance and security are expected to rise significantly going forward."

But, it added, "until any retaliatory action (for the 11 September attacks) becomes clear, the outlook will remain unpredictable."

Airport slump

International airport group BAA has also released figures on Wednesday, showing passenger numbers at London's Heathrow airport fell 19.7% in the eight days following the attacks.

Passenger numbers across the BAA group, which also includes Gatwick, Stansted, Glasgow, Edinburgh, Southampton and Aberdeen airports, were down 10.6% following the attacks and down 6% - or 11,242 - for September as a whole.

No sympathy?

But there is little sympathy for traditional airlines from the head of budget operator Ryanair.

Speaking on BBC Radio 4, the company's chief executive Michael O'Leary said BA has only itself to blame for following the wrong strategy.

"There is simply no way in a private sector industry that you can sit back and follow a policy which British Airways has been doing for the past several years - flying smaller airplanes, carrying fewer passengers and charging them higher fares," he said.

He said the collapse of Swissair could be good news for passengers as it would force airlines to rethink their strategy and cut prices.

Following the attacks in the US, Ryanair offered one million seats on its planes for 9.99 to try and maintain demand for air travel.

Meanwhile, budget carrier EasyJet said it had applied to fly to Belfast from Heathrow, a route being scrapped by BA.

EasyJet said it expected to get more market share in Switzerland and more flight slots as a result of the current crisis.

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 WATCH/LISTEN
 ON THIS STORY
The BBC's Simon Montague
"Figures for September confirm the impact of the terrorist attacks"
The BBC's Hugh Pym
"Consolidation seems to be the likely outcome of the current downturn"
See also:

03 Oct 01 | Business
US airlines cut fares to spur travel
03 Oct 01 | England
British Midland cuts 600 jobs
03 Oct 01 | Business
Swissair shares wiped out
03 Oct 01 | Business
Sabena files for bankruptcy
27 Sep 01 | Business
British Airways cuts flights
27 Sep 01 | Northern Ireland
Jobs blow as BA axes London route
27 Sep 01 | Business
Airlines mull security costs
25 Sep 01 | Business
TBI ditched by French suitor
20 Sep 01 | UK
Anger over job cuts
09 Sep 01 | Business
British Airways confirms job cuts
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