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Last Updated:  Friday, 21 March, 2003, 00:49 GMT
American Airlines makes war cuts
American Airlines' tail fin
The war will affect the airline whatever happens
The world's biggest airline, American Airlines, has warned that it will have to cut its flights because the Iraqi war is frightening off passengers.

The company is already struggling to save itself from bankruptcy protection.

"Even as we keep working, day in and day out, to keep this company afloat, we will have to trim some capacity as prices and supplies are impacted by the war," Donald Carty, chief executive of parent company AMR told employees.

"There can be no denying it: whenever the conflict ends, even if it's very soon, our airline will be affected," he said.

At the same time Air Canada announced it was reducing its workforce of about 40,000 by 3,600.

It said the war in Iraq underlined its need to cut labour costs.

Prolonging the agony

The world's airlines were already struggling to cope with a fall in demand following the September 11 terrorist attacks and a global economic slowdown.

Now the war with Iraq has put many people off booking flights.

The trans-Atlantic carriers have been worst affected.

Just hours before the US began to attack Iraq, Continental Airlines announced $500m of cost cuts and 1,200 job losses.

In Europe, Germany's biggest airline Lufthansa warned that war with Iraq could prolong the company's troubles.

Earlier in the week Australia's Qantas said it was temporarily cutting thousands of jobs by forcing staff to take leave.


SEE ALSO:
Continental cuts 1,200 jobs
20 Mar 03 |  Business
Lufthansa warns of war cost
20 Mar 03 |  Business
Iraq threat hits tourist trade
18 Mar 03 |  Business
American Airlines out of S&P 500
12 Mar 03 |  Business


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