=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2002/03/08/f= inancial1320EST0152.DTL ---------------------------------------------------------------------- Friday, March 8, 2002 (AP) Airline industry and travelers still adjusting six months after Sept. 11 BRAD FOSS, AP Business Writer (03-08) 10:20 PST (AP) -- Even under ideal circumstances, Dan MacKay does not really enjoy flying. So it was with particular grit that the pharmaceutical salesman from New York girded himself for the worst on a recent trip to Atlanta. The crew of Delta Air Lines flight No. 1281 alerted MacKay before takeoff there was a "security breach" and that his help would be needed in the event of a mid-flight emergency. A flight attendant explained that several passengers with suspicious "profiles" had boarded the plane leaving La Guardia Airport without proper screening. MacKay and another passenger -- this reporter -- agreed to assist the crew, who were visibly nervous as they tried to resolve the issue. MacKay admitted feeling "wishy-washy about staying on the flight" as the plane remained parked at the gate for about 45 minutes. It was the type of security pause that has become more common since Sept. 11. Delta conducted background checks on the questionable passengers. The pilot met privately with flight attendants at the back of the plane. And a no-nonsense security worker, who examined overhead bins and matched each piece of carry-on luggage to a passenger, warned travelers with these parting words over the loudspeaker: "Behave yourselves!" To say the least, air travel hasn't been the same since the terrorist attacks of six months ago. Some airlines are experiencing a nascent recovery, but the overall industry is still losing tens of millions of dollars by the day. Passengers, meanwhile, are getting acquainted with the brave new world of commercial aviation -- a world of plastic cutlery, bulletproof cockpit doors and the occasional airport evacuation. Among all the new security measures, including the federalization of baggage screeners, experts say the most important shift in air travel could be the willingness of passengers like MacKay to get involved in defending against terrorism. "The attitudes of pilots and passengers toward hijackers could very well be the biggest thing that's happened since September to improve safety," said Darryl Jenkins, director of the Aviation Institute at George Washington University. "That may bring us more security than anything else we're capable of doing, in all candor." Explaining his decision to remain aboard flight No. 1281, MacKay said: "= If I can do something to help keep people safe, then I'm going to do it." The Federal Aviation Administration has even suggested carriers hand-pick passengers before every flight who would assist the crew if a threatening situation arose. Financially speaking, the airlines could also use the traveling public's support, although the multibillion-dollar losses of 2001 are expected to recur in 2002. The biggest absence of spending is from business travelers, although the recession and Sept. 11 made leisure travelers more frugal, too. With all travelers bargain-hunting these days, airlines' profit margins are getting squeezed, especially those carriers with the highest operational costs, such as United and US Airways. But because carriers are offering cheap fares to lure Americans back to the skies, planes are less empty than they were immediately after the attacks. Another way carriers have been able to fill seats has been to cut flight schedules and fly certain routes with smaller planes. At the Mojave Airport in California -- which also serves as a large parking lot for planes -- more than 280 wide-body and narrow-body jets remain idled, compared with about 50 on Sept. 10, general manager Dan Sabovich said. The average number of flights per day in U.S. air space has fallen by about 8 percent in the past year to 33,081, according to the FAA. Dwindling revenues from business travelers -- who typically pay several times more per ticket than leisure travelers -- have had a devastating effect on the industry. To be sure, business travel spending has always been curtailed during a recession. But analysts believe this downturn could be different for two reasons: * The ire among business travelers about a ticket pricing model they consider to be unfair is growing, and with scenes of airport evacuations becoming more familiar, some have begun to take trains or rental cars on trips that are only a couple hundred miles each way. * Video- and Web-conferencing technology, which has vastly improved in recent years, was embraced on a wide scale by skittish travelers immediately after the attacks and some of those users are now hooked. "It's a permanent sea change in business communication," said Kevin Mitchell, chairman of the Business Travel Coalition in Radnor, Pa. Mitchell predicted it would be well into summer before business travel spending resumes to pre-Sept. 11 levels. "That's still at a problem level," he said, pointing out that major U.S. carriers were expected to lose a combined $3 billion in 2001 even before the attacks. By year end, net losses had surpassed $10 billion. There has been a gradual rebound in air travel. Analysts estimate passenger demand is about 11 percent below year- ago levels, but that still represents a significant month-to-month improvement since the attacks, when demand plummeted more than 30 percent. The major carriers are slowly restoring hundreds of flights and thousands of employees, while their lower-cost, lower-fare rivals such as Frontier and JetBlue continue adding business in markets where the majors either eliminated or drastically reduced service. Investors have taken notice of the industry's incremental gains, and have propelled the stock prices of major carriers such as American, Delta and Northwest within the range of their pre-Sept. 11 trading levels. "Stocks have recovered faster than fundamentals," UBS Warburg analyst Samuel Buttrick wrote in a research note. He predicted an industrywide loss of $3.5 billion in 2002. The industry's financial woes these past six months have been matched in intensity by the demand for better security. Flight attendants complain that they lack the necessary training to protect themselves and passengers, and pilots remain adamant about their desire to carry stun-guns, a proposal being reviewed by the Department of Transportation. Dawn Deeks, a spokeswoman for the Association of Flight Attendants, said the industry should be commended for installing bulletproof doors that protect the cockpit. A lingering problem, she added, is that flight attendants remain inadequately trained in self-defense and are left with no choice but to rely on passengers to protect the cabin. "They haven't done anything to help the people in the back of the plane," she said. =20 ---------------------------------------------------------------------- Copyright 2002 AP