DAMMAM, 29 April 2003 — The travel industry is at an all-time low in the Eastern Province, with many small travel agencies on the verge of closure and some foreign airlines planning to reschedule their flights to cut deficits.
The airline industry, which for years has suffered from excessive undercutting, received its first blow two months ago, when the United States started talking about its intention to attack Iraq.
“Although at that time the decline in passengers was still small, it was the beginning of a trend,” Ali Al-Shahari, manager of a travel agency in Dammam, told Arab News.
Once the war started, the market took a nose-dive, and there was hardly a flight from King Fahd International Airport that left with full capacity, he added.
Halfway through the war came SARS (Severe Acute Respiratory Syndrome), which forced thousands of travelers to postpone their travel plan to Far Eastern and many Southeast Asian countries. The travel industry initially hoped that the SARS scare would wane and the market would return to normal, but instead the situation got worse.
The government issued a travel advisory telling travelers to avoid countries hit by SARS. This affected bookings not only to the worst-hit countries such as Hong Kong, China and Singapore but also to many European and other Southeast Asian countries.
“The situation is very uncertain,” Al-Shahari said. “With the war our consolation was that it would come to an end sooner or later and things would get back to normal. But with SARS we have no such consolation. The disease has not even been contained yet.”
Foreign airlines operating from KFIA say that their situation is worse than for airlines operating from elsewhere in the Kingdom because of high operational costs at KFIA.
Last month, the Presidency of Civil Aviation (PCA) announced drastic cuts in operational cost, including landing charges, but it appears that the new rates have not been implemented.
“Many airlines stopped operation from KFIA, and with the decline in passengers, SARS and exorbitant airport charges, others might consider following suit,” said the manager of an Asian airline in Alkhobar.
He said the PCA should take stock of the entire situation and provide incentives to airlines so that their loss in revenue is compensated by cheap operational cost. “If that doesn’t happen, then the industry is in for a very bad time,” he said.
