*EPF415 10/25/01
ILO Meetings Examine September 11 Impact on Tourism and Aviation
(UN report estimates 9 million jobs affected in tourism) (980)
By Wendy Lubetkin
Washington File European Correspondent

Geneva -- The September 11 terrorist attacks in the United States have had economic repercussions in many sectors, but the impact on the international tourism and aviation industries has been especially profound and has already resulted in hundreds of thousands of layoffs, according to the International Labor Organization (ILO).

The crisis in civil aviation is expected to cost some 200,000 jobs, and the broader impact on global tourism could threaten up to nine million jobs worldwide, according to an ILO report released October 25.

The ILO has convened two separate crisis meetings on the economic turbulence buffeting the tourism and aviation sectors. The first meeting, held October 25-26 in Geneva, aims to highlight the situation of the millions of people whose livelihoods depend on the tourism industry, said David Katz, who is representing the United States at the discussions.

"The initial impact on this sector has been devastating," said Katz, minister counselor for commercial affairs at the U.S. Embassy in London and a specialist on international tourism. "But I have never seen an industry pull itself together the way this one has since September 11. We know that we have to work together as we have never worked together before, between employers and employees, between businesses, and between business and government. There is a coming together now and a sense that we need to be unified and look forward."

Ambassador Edward W. Stimpson, U.S. representative to the International Civil Aviation Organization (ICAO), will represent the United States at a second ILO meeting focused on civil aviation to be held October 29-30.

Stimpson said the terrorist attacks have sent a "shock wave" through the global aviation industry resulting in "massive layoffs, both at the airlines and in the manufacturing sector." Responding will require "a concerted effort by government, industry, and labor," he said.

"We will have to address this problem together because this is a completely new world, with new threats and new dynamics," Stimpson added. "We are confronting things we haven't even thought about before, let alone discussed."

The 29-30 October "Think Tank Meeting on the Impact of the 11 September Events for Civil Aviation" will bring together governments, independent and industry experts, as well as representatives of airlines and unions.

It has three purposes: to assess the situation and its broader social impact; to begin to develop possible strategies to respond to the crisis; and to prepare for a previously scheduled January 2002 meeting on restructuring in the aviation industry, which will now focus on the aftermath of the events of September 11.

"This is probably the most severe crisis of the modern aviation industry," ILO Director General Juan Somavia said. "In the last aviation crisis a decade ago, far fewer jobs were lost. Alleviating the impact of such crises on the basis of social dialogue is the forte of the ILO."

The International Air Transport Organization (IATA) has estimated that airlines may suffer a net loss of $7,000 million on scheduled international services this year.

"Altogether something like 10 percent of the world's fleet is grounded," IATA spokesperson Tim Goodyear said. "And something approaching 10 percent of the world airline labor force have lost their jobs or are about to lose their jobs."

In 1991, during the Gulf War, there was also a catastrophic fall-off in airline traffic, Goodyear noted. Nearly 10 percent of airline employees lost their jobs, but the job losses at that time took place "over a period of a year, and not in one to two months." Furthermore, the impact was mitigated somewhat by the fact that the sector at that time was much more regulated and government-owned than it is today.

The September 11 events came at a moment when many airlines were already "staring bankruptcy in the face," Goodyear said. Before the attacks, the industry was already projecting net losses of around $2,500 million on international scheduled services during 2001. Now annual losses for 2001 are projected at $7,000 million.

The United States has been particularly hard hit by the crisis. The ILO report suggests that U.S. job losses in the tourism sector could reach 3.8 million depending on how travelers react in the coming months.

The United States has already put in place a variety of programs to help Americans who suffer job loss, Stimpson pointed out. President Bush and Secretary of Labor Elaine Chao have announced an emergency unemployment compensation program that extends unemployment benefits over a longer period. The Bush administration also developed "Special National Emergency Grants" to allow states to ensure that their affected residents do not lose health insurance coverage and do receive income support. Programs have also been set up to facilitate re-training and return to the work force.

The focus of both domestic and international efforts must be "to preserve jobs, get people back to work, and get the industry stabilized and healthy," Stimpson said. "This is a time for innovation on the part of all."

"We are in an entirely new environment now. We are looking at new security procedures, whether it is air marshals or the federal government taking over the screening process," he said. "The costs are huge, and the whole system of how we do business is being reexamined."

"Airline travel does seem to be picking up," Stimpson said. "It is picking up slowly, but it is picking up, and that is good news for the world economy."

The ILO report entitled "The social impact on the hotel and tourism sector of events subsequent to September 11" is available via the ILO website: www.ilo.org.

(The Washington File is a product of the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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