=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/chronicle/archive/2002/05= /18/BU237251.DTL ---------------------------------------------------------------------- Saturday, May 18, 2002 (SF Chronicle) Major airlines still losing money/Passenger revenue down 21% in April David Armstrong, Chronicle Staff Writer Passenger revenue at major U.S. airlines continued to plummet in April as major airlines reported a 21 percent drop from a year ago. The dismal figure came from the Air Transport Association, a trade organization based in Washington that includes all the major U.S. carriers except maverick low-fare airline Southwest. Airlines have gradually restored service dropped after the terrorist attacks of Sept. 11, but business travelers, who traditionally pay high, walk- up fares, are still staying away. Leisure fares continue to be low in the post- Sept. 11 climate as the airlines hope to lure fliers by discounting tickets. Airline passenger traffic and revenue were falling even before Sept. 11 because of the soft economy. Combined with reverberations from the attacks, which caused airlines to trim an average 20 to 25 percent of their flights and staffing levels, the airlines lost a record $7 billion in 2001. Traffic has been slowly returning but profitability has not. American Airlines, the world's largest, lost nearly $300 million during the first quarter of this year, while United Airlines, the second-largest carrier, lost $510 million. By contrast, Southwest Airlines reported $21.4 million in profit during first quarter. The April figures do not augur well for the health of the airline industry. "We sort of hit this wall, and things aren't recovering as fast as I hoped, " said Dave Swierenga, the ATA's chief economist. Passenger traffic, or miles flown by paying travelers, fell 13 percent in April from a year earlier, after a 9 percent drop in March. (Southwest's passenger traffic was down in in April, but only by 3.1 percent.) "Traffic is still limping. I wouldn't expect prices to recover when traffic is down like that," Swierenga said. Industry analysts say business won't improve until the industry recovers business travelers. "It's going to be a long, slow bleed for a while," said Michael Friedman, equities analyst with American Express Financial Corp. in Boston. The carriers' April unit revenue, measured for every seat flown a mile, was 10 percent lower than a year earlier. E-mail David Armstrong at davidarmstrong@sfchronicle.com., Bloomberg News contributed to this report.=20 ---------------------------------------------------------------------- Copyright 2002 SF Chronicle