NYTimes.com Article: Airlines, Already Ailing, Cut Flights

[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

 



This article from NYTimes.com
has been sent to you by psa188@xxxxxxxxx



Airlines, Already Ailing, Cut Flights

March 21, 2003
By EDWARD WONG






With the start of the second Persian Gulf war, airlines
around the world - already battered by the industry's worst
downturn - cut back even more on their schedules yesterday,
especially on flights to the Middle East. Some carriers
also said they would have to cut costs by laying off
workers or reducing pay.

Large American companies like Pfizer and Tyson Foods said
they had clamped down on employee travel. Many unfazed air
travelers took to the skies, though, having expected for
days that the American invasion of Iraq could start at any
time. But some passengers said they had seriously thought
about changing their plans as war appeared imminent.

"I would have canceled my trip, but I would have lost my
ticket, so I'm going," said Diane Clark, a 55-year-old
nurse and missionary who was calmly eating lunch yesterday
at O'Hare International Airport in Chicago before flying to
Ethiopia. "After listening to the news, I probably would
have waited to take this trip."

Ms. Clark said she had paid $1,600 for her ticket on
British Airways.

Airlines said bookings had already fallen sharply compared
with those at this time last year. A lawyer for US Airways,
which hopes to emerge from bankruptcy protection in 10
days, told a judge yesterday that bookings had dropped by
20 percent in the last week.

The speed at which traveler confidence returns will depend
on the length of the war and whether terrorist attacks
occur, executives and industry experts said.

Lufthansa Airlines, the German carrier, suspended service
for two days to Kuwait, Tel Aviv and Amman, Jordan. Air
France cut a flight to Amman from Paris. KLM, the Dutch
carrier, said it was canceling flights between Amsterdam
and Kuwait today and Sunday, and two flights to Amman
today. It said it would fly to Tel Aviv only in daylight
hours.

Singapore Airlines took a more sweeping approach, saying it
will cut 65 flights a week from late March to May 31 to
cities in the United States, Europe, Asia and Africa.

American Airlines, the world's largest carrier, is likely
to make changes to its international schedule, said Todd
Burke, a company spokesman.

In total, more than a dozen airlines have cut their
schedules since Monday night, when President Bush issued a
48-hour ultimatum to Saddam Hussein to leave Iraq. The
opening salvo against Baghdad on Wednesday night sent
airline planners back to their computers, scrutinizing
where passenger bookings had dipped and which flights could
be cut. The International Air Transport Association said
bookings would fall about 10 percent now that the war had
started.

Industry analysts said airlines in the United States would
probably cut capacity by at least 10 percent. United,
operating under bankruptcy protection, has said it may have
to cut its capacity 10 percent to 12 percent.

Kurt Ebenhoch, a spokesman for Northwest Airlines, said
schedule changes were "a matter under study here."
Northwest is suspending through Sunday its daily flight
from Amsterdam to Bombay.

The carriers took similar actions during the first gulf war
in 1991. A half-year passed before capacity returned to
prewar levels, said Michael Allen, chief operating officer
of Back Aviation Solutions, an airline consulting company
based in New Haven.

"What you're going to see is parking of airplanes by each
of the Big Six carriers, and they're going to pull down
capacity," Mr. Allen said. "They'll also have to make
judgments in terms of which markets will be more affected.
For example, areas like the trans-Atlantic will be
disproportionately affected because there will be more
concern in that area."

In February 1991, during the first gulf war, trans-Atlantic
traffic plummeted 44 percent from the month a year earlier,
and travel across the Pacific fell 21 percent, according to
the Air Transport Association, the industry's main trade
group in this country.

The drop is likely to be less this time because the weak
economy has already slowed travel for nearly three years
and because travelers are relatively inured to the threat
of a terrorist strike after the Sept. 11 attacks in 2001.

With the price of crude oil in sharp fluctuation, almost
all the big carriers have hedged their fuel costs, though
to varying degrees. Southwest Airlines has hedged all of
its fuel costs this quarter, with 85 percent capped at $23
a barrel for oil. American has 40 percent hedged, and
United none, according to a recent report from Susan
Donofrio, an analyst at Deutsche Bank.

The major American carriers could lose up to $10.7 billion
this year and be forced to cut 70,000 jobs if there is a
prolonged war, the Air Transport Association said.

US Airways said in bankruptcy court yesterday morning that
it might have to impose a 5 percent wage deferral on its
workers now that the war had begun.

The company's lead lawyer, John W. Butler Jr., said the
airline might also have to reduce its fleet below the
minimum level of 279 planes mandated by its contract with
the Air Line Pilots Association. To make those cuts, US
Airways would have to invoke the so-called force majeure
clause of the contract, which gives the company leeway to
enact drastic operational changes to cope with a war,
terrorist attacks or acts of God.

Mr. Butler also said that US Airways would miss a $27
million lease payment today on Airbus planes and that it
had reached an impasse in negotiations with the pilots'
union over pension obligations. The airline will not be
able to emerge from bankruptcy protection until it resolves
those obligations.

Air Canada said yesterday that it would cut 3,600 jobs by
the end of the year. On Wednesday, Continental Airlines
said it was eliminating 1,200 jobs, perhaps the prelude to
a wave of layoffs among the main United States carriers.

At many large airports, police officers and security guards
conducted random searches of arriving cars. Some passengers
stared as teams of guards marched through the terminals
with a sense of purpose not seen since the days after the
Sept. 11 attacks. Signs had been put up overnight warning
travelers to expect heightened security measures.

At New Orleans International Airport, a group of 35
clean-cut young men dressed in red, white and blue
windbreakers stood restlessly in line at a United Airlines
counter. The young men, baseball players from the
University of Illinois at Chicago, were on their way home
after playing in Louisiana. Their coach, Mike Dee, said
they might start traveling more by bus if flying proved
perilous in the weeks to come.

"I think any time you're in charge of 35 people,
particularly young people, sure you're concerned," he said.
"You'd hate to have people afraid to do what's normal, but
we certainly learned two years ago that things do change."

http://www.nytimes.com/2003/03/21/business/21AIR.html?ex=1049275111&ei=1&en=b77a0e4932d7d3d2



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
onlinesales@xxxxxxxxxxx or visit our online media
kit at http://www.nytimes.com/adinfo

For general information about NYTimes.com, write to
help@xxxxxxxxxxxx

Copyright 2003 The New York Times Company

[Index of Archives]         [NTSB]     [NASA KSC]     [Yosemite]     [Steve's Art]     [Deep Creek Hot Springs]     [NTSB]     [STB]     [Share Photos]     [Yosemite Campsites]