This article from NYTimes.com has been sent to you by psa188@juno.com. /-------------------- advertisement -----------------------\ Share the spirit with a gift from Starbucks. Our coffee brewers & espresso machines at special holiday prices. http://www.starbucks.com/shop/subcategory.asp?category_name=Sale/Clearance&ci=274&cookie_test=1 \----------------------------------------------------------/ Explosives Incident Adds to Airline Industry Tension December 25, 2001 By LAURENCE ZUCKERMAN The passenger aboard an American Airlines plane on Saturday who tried to ignite explosives in his shoes may have come very close to realizing the airline industry's nightmare scenario. Ever since the Sept. 11 attacks sent carriers into their worst financial plunge in history, executives have worried that the downing of another jet by terrorists would reverse the industry's slow but steady recovery. The incident underscores simmering questions about the public's lack of confidence in the stepped-up security measures adopted by airlines and airports since Sept. 11 and whether American Airlines is being singled out because of its name. American and other airlines did not return calls for comment yesterday. But in an internal message to employees, Donald J. Carty, the chief executive of the AMR Corporation (news/quote), American's parent, praised the crew of Flight 63 for foiling a potential disaster. He also praised American employees in Paris, who he said became suspicious of the passenger when he tried to board the same flight on Friday and alerted the French authorities who cleared him to fly on Saturday. "As a result of this incident, we now have implemented even more stringent security screening procedures, and passengers can expect to see a heightened level of security at the airport," Mr. Carty added. So far, the initial effect of the foiled bombing on passengers appears to be mild, analysts said. But they warned that it was too early to tell and that much could change as more facts emerge. "This is a good test to see how frazzled travelers' psyches are," said Glenn Engel, an aviation analyst at Goldman, Sachs & Company in New York. Mr. Engel said that he spoke to several airline executives yesterday who reported that there was no significant increase in last-minute cancellations by passengers. It was too early to tell whether future reservations would be affected because advance bookings are usually slow during the holidays, he added. So far, large numbers of passengers have been able to shrug off safety-related incidents since Sept. 11. Many experts feared that last month's crash of American Flight 587 after it took off from Kennedy Airport in New York would be a serious blow to the industry. But investigators quickly declared the crash an accident, and bookings only dipped for a few days. One theory holds that with passenger traffic down about 25 percent, nervous fliers are already staying on the ground while those who have returned to the air since Sept. 11 are more willing to discount concerns about a crash or the possibility of another terrorist attack. David S. Stempler, president of the Air Travelers Association, which represents passengers, said yesterday that some of his members reported that their families were once again pressing them not to fly, something he said he heard a lot in October. He added that the thwarted bombing attempt, which occurred on a flight from Paris to Miami, may have less of an effect on domestic than international travel, which was already hit harder by Sept. 11. "This sort of reinforces that the dangers are overseas," Mr. Stempler said. Several experts added that some passengers were bound to raise concerns that American, which also operated Flight 587 and two of the four planes hijacked and crashed on Sept. 11, was becoming a favorite target. American, which is the world's largest airline, has seen only a slightly larger drop in passenger traffic than its rivals over the last three months. That could be because American carries a higher percentage of business travelers - the group that has declined most sharply this year - compared with other airlines. Mr. Engel thinks that the airlines as a group more than American alone are threatened by the incident on Saturday. "It wasn't Delta, Continental or Southwest that were hit by the first attack," he said, "yet their revenue growth collapsed as much as American's did." Airline executives will now face even greater pressure to meet a January deadline for screening all checked luggage. Since Congress passed a new airline security bill last month, some executives have balked at the new requirements, saying that they will be costly and cause excessive delays. Earlier this year, Washington was most concerned with how airlines could reduce delays and improve service. "The transition from focusing on congestion to high-security travel is a very difficult one," Mr. Stempler said. "It's expensive and the lines could really turn off a lot of people. How do you manage that?" http://www.nytimes.com/2001/12/25/business/25AMER.html?ex=1010288245&ei=1&en=f6299e52e435ed3e HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact Alyson Racer at alyson@nytimes.com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@nytimes.com. Copyright 2001 The New York Times Company