- The Washington Times - Thursday, September 13, 2001

DALLAS (AP) — The image of commercial aircraft laden with ordinary travelers being used as terrorist weapons will sharply depress air travel at a time when major carriers face severe financial pressures, analysts say.
"This was so massive and so well-planned that there's going to be a really steep falloff in travel," Ray Neidl, an analyst with ABN Amro, said of the terrorist attacks Tuesday that destroyed the World Trade Center and damaged the Pentagon.
That will compound higher labor costs and fuel prices already squeezing airlines.
"This was going to be a bad year for the airlines; it could turn into a record loss year," Mr. Neidl said.
Travel agents said the attacks were already hurting sales.
"The cancellations started almost immediately," said Ed Kopec, who runs the call center for travel Web site Lodging.com. "We're doing more cancellations and modifications than bookings."
The fear apparently extends beyond U.S. borders. Mr. Kopec said a few foreign tourists canceled trips this fall to the United States.
U.S. air travel was severely restricted yesterday. Flights diverted after the attacks were authorized to finish their journeys yesterday, but all other planes remain grounded for a second day. Federal Aviation Administration officials said they did not know when other flights would be allowed to resume.
U.S. airlines have been dogged all year by weak demand for travel, especially among higher-paying corporate passengers, as the economy abruptly cooled.
The carriers responded by slashing prices, but analysts say even lower prices won't attract enough passengers who will overcome fear and fill their planes.
The first casualty appears to be Midway Airlines. The carrier, based in Raleigh, N.C., said yesterday it would suspend all flight operations, putting its 1,700 employees out of work.
The company said in a statement that the action was being taken "with the recognition that, following the recent terrorist attacks, demand for air transportation is expected to decline sharply."
After several boom years, most major carriers have been losing money this year. Several analysts have said in recent weeks that the major carriers could lose $2.5 billion this year. Mr. Neidl said he now believes the losses could approach the $4.5 billion loss of 1992.
The Business Travel Coalition of corporate travel managers said it surveyed nearly 400 companies after Tuesday's toppling of the World Trade Center towers in New York and the attack on the Pentagon with hijacked commercial airliners, and 88 percent said they expected to reduce travel in coming weeks.
The closest parallel to Tuesday's attacks, which killed 256 persons aboard the planes and an untold number in the buildings, might be the December 1988 explosion of a Pan Am Boeing 747 over Lockerbie, Scotland.
The Pan Am bomb, blamed on Libyan terrorists, killed 270 on the London to New York flight and on the ground. In the month after the attack, trans-Atlantic travel fell by about one-third, analysts said.
American and United airlines each had two planes hijacked and deliberately crashed Tuesday. Observers doubted that travelers would especially avoid those two carriers — unless investigators determine that airline employees helped the terrorists.
Pan Am was found to have ignored security warnings before the Lockerbie bombing, "and that had a lot to do with the demise of Pan Am," said Terry Trippler, who tracks the industry for online ticket seller OneTravel.com.


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