Shadow Tourism Minister David Dodwell (pictured, right) has called for Government to give a cash guarantee to airlines to encourage them to come to the Island after last week's terrorist outrages.

He said three of the major US airlines say the are downsizing flight services by 20 percent world-wide - but Government should offer to pay the shortfall if planes fall under 65 percent full.

And he said: "The down sizing had has already started in the Caribbean but air service is critical to our success."

He said the deal should be offered to airlines flying out of key cities of New York, Boston, Philadelphia, Atlanta, Washington and Toronto.

He said: "This would say we want to work with you and want you to fly to Bermuda. Sixty five percent is the breakeven figure."

He said there should be an immediate stop to traditional advertising campaigns until the full impact of the plane hijackings on tourism been assessed.

"It would be money wasted. We need to do something different and think out of the box.

Mr. Dodwell denied that the terrorist tragedies in the US were the death knell for Bermuda's tourism industry - despite increased lay-offs in the hotel industry and fears that some hotels may have to close this winter.

He said Bermuda would have advantages as Americans adopted a more cautious approach to travel.

"Bermuda's conservative reputation could help. We are close, we are safe but we are still a foreign destination so American tourists get the feeling they have gone somewhere different,'' he said.

"People won't want to go to South America or Europe. We are in an ideal position if we plan strategically to bring them here.

"We need to have the flights, that's where we should spend the money."

He called for Tourism Minister David Allen to abandon plans to spend $500,000 on the American Society of Travel Writers conference.

"This will create a pool of funds,'' he said.

"The hotels are in rough shape and it's getting worse but I am not trying to be prophet of gloom, I am cautiously optimistic people will start to travel again."

He said direct e-mail marketing and media campaigns should be used rather than traditional advertising campaigns which would fall on deaf ears due to the fall out from terrorism attacks in the US.