Rising air fares and a drop in trans-Atlantic visitors are likely to hit the travel industry following the American terrorist atrocities, analysts and industry leaders warned today.

Some airlines could even go out of business as passenger numbers drop off, experts predicted.

"Tuesday's events will have a catastrophic effect on world aviation," said Phil Butterworth-Hayes, civil aviation editor of Jane's Information Group.

He said: "Lockerbie had a dramatic effect on aviation, with Pan-Am going out of business. But this is far worse and is the blackest day aviation has ever had.

"There will have to be a complete rethink of the way the air travel business is conducted. Air fares are going to go up because someone will have to pay for all the changes.

Mr Butterworth-Hayes said that in the medium term airlines could go out of business.as the industry faced "an extraordinarily gloomy prospect".

Meanwhile tourism chiefs expressed fears that the atrocities would drastically cut the number of American visitors to Britain.

America is the UK's biggest tourism market, with about four million US visitors coming to Britain each year.

"The events in America are bound to have a big effect on tourism but much will depend on what happens now," said Richard Tobias, chief executive of the British Incoming Tour Operators Association.

"If the terrorism leads to America sliding further into recession, then visitor numbers will be affected.

"The number of American tourists coming to Britain and Europe could go down if America decides to take retaliatory action against whoever it perceives are the perpetrators of these atrocities. We know that in these situations the Americans do tend to stay put and not travel."

He urged hotels to accommodate stranded Americans free of charge until flights restarted.