The organisation's secretary general Francesco Frangialli was speaking as Dutch carrier KLM announced it would shed thousands of jobs as a result of the crisis facing the industry.

"The main sector concerned is air travel, which is very seriously affected," Frangialli said.

A longer-than-expected war in Iraq would postpone a recovery in the global tourism sector, he said, adding that the way the war had progressed so far "does not encourage optimism".

Airlines had already cut thousands of jobs in the United States and more redundancies were in the pipeline, he said.

KLM said in a statement it would cut "several thousand jobs" by speeding up restructuring plans, as a result of the Iraq conflict and alarm over the spread of Severe Acute Respiratory Syndrome (SARS), the mystery strain of pneumonia that has now infected some 1,700 people and killed over 60 worldwide.

The announcement came a day after the Association of European Airlines said the first week of conflict in Iraq had seen a 12.3-percent drop in passengers travelling with European carriers.

European passenger traffic to the Middle East had dropped 42.2 percent, the AEA said, while intra-European routes saw a drop of 14.6 percent and transatlantic routes lost 10.2 percent.

During the 1991 Gulf War, which lasted two months, the International Air Transport Association estimated that airlines lost around two billion dollars (1.84 billion euros) in revenues due to a 12-percent fall in passenger traffic in January and a 17-percent drop in February.

Figures for the second week of the Iraq conflict were expected to be even worse, the AEA said, since they were also likely to be hit by the further spread of the SARS virus, thought to have originated in China before moving to Hong Kong.

Asian airlines have had to reduce flights as passenger numbers plunged in the wake of the outbreak, with many companies cancelling staff travel to Hong Kong, Singapore and southern China.

The economic crisis approaching global airlines raises the prospect that carriers all over the world may be forced to turn to their governments for more financial aid of the kind seen after the September 11, 2001 terror attacks, in order to fend off bankruptcy.

Republican US Senators last week met to agree on proposals for a 2.8-billion-dollar package of aid to struggling US airlines. Washington may include the bail-out in a new budget to be submitted to Congress by President George W. Bush, the Wall Street Journal reported.

Meanwhile, the Canadian government is preparing to issue up to 500 million Canadian dollars (341 million dollars, 313 million euros) in conditional loans to Air Canada, the heavily indebted national carrier, according to a report in the Toronto Star newspaper.

European airlines have been quick to react to the news of foreign state aid.

"If the war has clearly identifiable effects on costs -- security and insurance being those that spring to mind -- these should be met by governments, particularly in the light of the 2.8-billion-dollar aid plan being offered to American carriers," said AEA secretary general Ulrich Schulte-Strathaus.

SPACE.WIRE