Air Transport World

Trouble in paradise: the terrorist attacks last fall in Bali and the Philippines had an immediate impact on inbound travel, but the long-term effect still is uncertain. (Analysis).

The terrorist bombs that tore through the Bali nightclub district last Oct. 12 were designed to inflict maximum damage to the innocent victims and to the local economy of the tropical paradise in which they occurred. In this they succeeded.

Less clear is the impact that the despicable act will have on the region's airlines, which depend heavily on tourism and holiday traffic. Analysts polled by ATW agree there are two possible outcomes from the attacks in Bali and simultaneously in Zamboanga and Manila in the Philippines: A sharp decline that soon rights itself or a prolonged downturn in tourism and related sectors.

According to a report from the Centre for Asia Pacific Aviation published in November, the best the region can hope for is a swift and concentrated decline in long-range international traffic for the next six months. "But if a renewed conflict erupts in the Middle East or further attacks occur in Southeast Asia, the prognosis is considerably worse," warned CAPA founder Peter Harbison.

While Harhison suggested that "travel operators may be subject to a snowball effect which will prolong market dislocation and defer prospects for recovery at least until 2004," he said it is too early to measure the impact on aviation. …

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