NYTimes.com Article: Travelers Have Enough Worries; Airline Woes Hardly Faze Them

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Travelers Have Enough Worries; Airline Woes Hardly Faze Them

April 26, 2003
By DONNA ROSATO






When Rick Kupcunas heard rumors a few weeks ago that
American Airlines might file for Chapter 11 bankruptcy
protection, the Dallas-based technology consultant cashed
in 150,000 of his frequent-flier miles to get four tickets
for a family vacation to the West Coast.

"I'd rather spend them than lose them," said Mr. Kupcunas,
a senior manager at Deloitte & Touche who flies 175,000
miles a year, mostly on American, which is owned by the AMR
Corporation.

But Mr. Kupcunas has little to fear. American Airlines
seems to have ducked the threat of an immediate trip to
bankruptcy court, and even had American filed, his miles
would have been safe. Indeed, the experience of travelers
lately is little influenced by airline bankruptcies and
much more by other factors, from the weak economy and fears
of terrorism to severe acute respiratory syndrome and the
recent war with Iraq.

With the steep downturn in travel because of those factors,
airlines have slashed schedules, leaving people who do want
to fly with fewer options. Popular morning and afternoon
flights are often packed. But demand has fallen even faster
than the supply, so fares over all are dropping, and it is
sometimes easier for frequent fliers to upgrade to better
seats.

Moreover, with fewer planes in the sky, the whole air
travel system is working better, according to government
statistics: Airlines are posting better on-time performance
and losing fewer bags. "The airlines have made capacity
cuts because of SARS and the war with Iraq, but I don't
think a bankruptcy filing by American would result in a
substantial reduction in service," said Mo Garfinkle, chief
executive of GCW Consulting, an international aviation
consulting firm.

In fact, some carriers are restoring capacity that they cut
just before the war with Iraq started in March. On
Thursday, Delta Air Lines announced that in June, it would
restore most of the domestic and international service it
suspended in April and May.

That will be a relief to frustrated fliers on Delta's East
Coast shuttle.

At LaGuardia Airport yesterday afternoon, dozens of
travelers were unable to get on overbooked shuttle flights.
John Kennedy, a Delta spokesman, said Delta hurried to add
several flights to cope with the overflow.

After bankruptcy filings last year by United Airlines,
which is owned by the UAL Corporation, and by US Airways,
travelers seem barely to blink at the prospect these days,
airline experts say.

"The stigma of bankruptcy doesn't exist with the airline
industry," said Hal Rosenbluth, the chief executive of
Rosenbluth International, a corporate travel agency.

Like United, which remains in bankruptcy court, and US
Airways, which has completed its reorganization, American
has been ratcheting back its operations for months.
"American has already done a substantial downsizing in
terms of grounding aircraft and cutting back schedules,"
said Dan Kasper, managing director at LECG, an economic and
financial consulting firm that specializes in aviation.

One challenge for Gerard J. Arpey, the newly promoted chief
executive of American, will be inspiring a work force
facing pay cuts and tougher work rules - and whose anger
helped drive his predecessor, Donald J. Carty, out of the
job on Thursday.

Some heart, perhaps, can be taken from the performance of
United. With workers under similar strains, customer
satisfaction measures at United actually have been
improving.

In part, airlines are performing better because so many
travelers have been grounded. Half-full flights also mean
it is easier for fliers to move up to first-class and
business-class seats.

Steve Klein, a training consultant in Dallas who flies
about 50,000 miles a year on American, said that he had
been frustrated by having fewer flights to choose from. But
he was happy when he was upgraded on a flight from Dallas
to St. Louis earlier this week.

"There were a few empty seats in first class," he said.


With the war over and the summer travel season looming,
airlines are hoping that more travelers will take to the
skies. While international travel remains weak because of
SARS and lingering fears about terrorism, domestic travel
is showing some signs of picking up, some travel companies
said.

At Rosenbluth, domestic travel bookings during the last
four weeks were 15 percent higher than the month before.
"Travel has picked up domestically," Mr. Rosenbluth said.
"Corporations are starting to send people out again."

http://www.nytimes.com/2003/04/26/business/26CONS.html?ex=1052383276&ei=1&en=93b5d39d0b3b5fc4



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