The US-led war against Iraq and the Severe Acute Respiratory Syndrome have led to a sharp decline in the demand for air travel and raised costs drastically on account of high aviation turbine fuel prices, the Lok Sabha was informed on Monday.

Civil Aviation Minister Shahnawaz Hussain said in reply to questions that while Air-India had suspended the operation of 14 flights in the Gulf region and 17 flights in South-East Asia, Indian Airlines had not followed suit so far.

The airlines are cancelling some flights for a limited period only to contain the losses, he said.

Due to the Iraq war, Air-India has incurred an additional expenditure of Rs 25 crore (Rs 250 million) and suffered a revenue loss of about Rs 10 crore (Rs 100 million) this March.

Air-India suffered an estimated loss of about Rs 7.8 crore (Rs 78 million) due to SARS, while Indian Airlines' loss is estimated to be around Rs 92 lakh (Rs 9.2 million), Hussain said.

After reports about non-availability of seats for Indians in the wake of Iraq war, Civil Aviation Secretary K Roy Paul visited Kuwait and was assured by local authorities that Kuwaiti airspace and airport would not be closed.

Following this assurance, government decided to continue operations to Kuwait by Indian carriers, he said.

In reply to another question on the foreign direct investment limit for construction of airports, Hussain said the policy on airport infrastructure had laid down that foreign equity participation in this area was permitted up to 74 per cent with automatic approvals and up to 100 per cent with special permission.

Such participation could also be by foreign airport authorities.