New UN labour agency report predicts further turmoil in airline industry

The impact of the 11 September terrorist attacks on the airline industry – originally felt more by the major carriers of Europe and North America – will spread to airline companies in Africa, Asia and Latin America, according to a new report prepared by the United Nations International Labour Organization (ILO).

The report, which will be discussed next week by representatives of labour groups, employers and governments meeting at the ILO’s Geneva headquarters, predicts that some airlines will be forced to liquidate their operations, while others may be re-nationalized or receive subsidies. “The end result will be a move in the direction of industry consolidation that will present challenges for governments, users and airlines alike.”

Looking to the wider consequences of these developments, the report warns that layoffs among airline staff are likely to spread to other segments of the labour market. For every direct flight job lost, at least four jobs are lost on the ground in airports – in such areas as catering, baggage, maintenance and airport security – and approximately three jobs around the perimeter of airports – in hotels, transport and support services for airlines and passengers.

With airline traffic forecasts for short-term growth all negative, the report says the full rebound will take place in 2003. Recovery will depend on external factors such as recessionary conditions worldwide, a sharp increases in insurance costs, increased security costs and lingering passenger concerns over safety.

During their week-long meeting, representatives will discuss the consequences of the crisis facing the airline industry and to aim to develop guidance to governments, national employers’ and workers’ organizations and the ILO on ways to address them.