TNN

Mumbai, Nov 28: Wednesday's terror attacks could affect the already struggling airlines industry and the travel & tourism sectors for at least next two to three months. Other than the direct impact of lower travel needs due to a slowing economy, there is a high probability of what analysts term `collateral damage', like dip in tourist inflows because of adverse travel advisory by other countries on India.

The silver lining, at least for the airlines industry, is the recent dip in crude oil price, that could lead to lower ATF prices, which, in turn, could allow the operators to cut price of tickets to attract more travellers to fly.

Within 24 hours of Wednesday's attacks on the city, Australia has cautioned its citizens about travelling to India. Market players now feel more countries could follow Australia. "Negative developments like these could lead to collateral damage for the airlines as well as travel & tourism industries,'' said Amitabh Chakraborty, president-equities, Religare Securities. Such warnings, coming just before the busy holiday season, could aggravate the pains for these industries, analysts feel.

These industries could also be affected by the cancellation of international conferences, earlier scheduled in India, Chakraborty said. For example, on Thursday, a leading ratings agency cancelled its scheduled conference in one of the two five start hotels in the city, majorly affected by the attacks.

However, marker players feel the slide in these sectors could be a temporary phenomenon. "There could be some immediate reaction to the blasts on these sectors. But I think in another 2-3 months, it would be back on track,'' said Arun Kejriwal, director, KRIS.

In the aviation sector in particular, a lot of bad news like higher cost of operation due to high ATF prices, some slowdown in the services industry leading to lower demand for air travel etc, have already been factored in, market players said. For example, over the last one year, the Jet Airways stock has lost over 84% in value to its current value of Rs 138.

Kejriwal also believes that with the ATF prices coming down, the aviation industry would soon be able to cut airfare which in turn would lure travellers to come back to air travel. "It might even lead to rise demand,'' Kejriwal said.