Meetings & Conventions: Newsline
ANALYSTS EYE LONG-TERM
EFFECTS OF LOW RIDERSHIPAirlines Struggle to Fill Empty SeatsD
espite an aggressive
courtship of consumers by airlines in the month following the Sept.
11 terrorist attacks, carriers filled only 59 percent of seats in
flight schedules generally running 80 percent of their former
capacity, according to the Air Transport Association.
While traffic numbers have since shown a slow rise, airlines
still face some old problems: high fuel and labor costs. According
to the ATA, revenue has been negative for business travel since
December 2000 and for personal travel since May 2001.
The dramatic drop in traffic after Sept. 11 is likely to reshape
an already-suffering industry, analysts predict. In the weeks after
the attacks, layoffs numbered close to 100,000.
"What is out of the airlines' control is the sense of the
comfort of flying, and that's really what is depressing the traffic
moving forward," said Bill Oliver, vice president of the Evergreen,
Colo.-based aviation analysis firm, the Boyd Group. "The whole
market is going to be depressed in the 8 or 9 percent range."
"We've never had terrorists take control of American flights
before, so it's tough to gauge consumer confidence," added Bob
Walberg, chief executive analyst at financial research firm
Briefing.com, who said carriers with strong numbers, such as
Frontier Airlines, Alaska Airlines and Southwest, are more likely
to come out ahead once normal travel resumes.
And while the media has been focused on larger, international
airlines, Walberg expects regional carriers to be hit hardest if
travelers forego flying for ground transit.
One scenario, evidenced in part by the temporary shutdown of
Swissair in October, is that some carriers, even those receiving
federal aid, will further suspend if not completely discontinue
service. "Any corporate travel manager should be very concerned
about America West and US Airways," said Oliver. "If those carriers
go out, you're looking at a significant amount of capacity that
would go away."
Gail Bill, Northwest Airlines' meeting and incentive sales
senior manager, noted, "I think we're going to have to wait until
Thanksgiving to see [the real impact], because around that time we
usually see huge loads on our planes."
• BRIAN ORSAK
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