=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/c/a/2006/08/11/BUGPNKFS2H= 1.DTL --------------------------------------------------------------------- Friday, August 11, 2006 (SF Chronicle) Airlines take another hit/Bomb plot in Britain comes as U.S. carriers were = starting to recover from years of losses David Armstrong, Chronicle Staff Writer The terrorist plot to blow up U.S.-bound airplanes, disrupted by British authorities Thursday, caused short-term damage to U.S. airlines that had just begun to make money again after a long slump. Airline stock prices gyrated, travelers were delayed and confused, and airlines posted revised flight-cancellation policies. British Airways, which canceled 400 of its London Heathrow flights on Thursday, took the biggest hit, with its stock dropping Thursday by nearly 3 percent, to $70.48 from $73.33. Three U.S. airlines reported to be targets of the bomb plotters reported mixed results. United Airlines owner UAL fell 1.3 percent, to $23.52 from $23.88. Continental Airlines fell 1.5 percent, to $23.86 from $24.21, and American Airlines closed at $20.29, unchanged for the day. The long-term effect of the bomb plot is far from certain, industry experts said. If the plot is truly contained, as British authorities believe, its effects on airlines will be less dramatic than the continuing high prices of jet fuel, some said. But if the public's threat perception remains high during the remaining month of the peak summer travel season, it will complicate U.S. airlines' efforts to pull out of the money-losing slump that followed the confluence of the Sept. 11, 2001, terrorist attacks using hijacked United and American aircraft, the SARS scare, fears inspired by the war in Iraq, and alarm over a possible outbreak of avian flu. Major U.S. carriers recently posted second-quarter profits, with United = -- the dominant carrier at San Francisco International Airport -- recording its first profitable quarter in six years. But the latest threat may complicate efforts by major U.S. carriers to rebuild. Ironically, major carriers, notably United, American and Continental, ha= ve made international travel a key element in their hoped-for recovery. Of the three, United may be affected the least because it has taken planes off domestic routes and put them chiefly on transpacific routes between the West Coast and East Asia. The effect on business travel between the United States and the United Kingdom on usually crowded transatlantic routes is negative and immediate, said Kevin Mitchell, president of the Business Travel Coalition, an organization for corporate travel planners. "A considerable amount of business travel to the U.K. will be canceled f= or today and the rest of the week due to security concerns, as well as airport hassles," Mitchell said Thursday. Such fears could also cause travelers to book away from U.S. carriers and fly on foreign airlines instead, he said. United reported no flight cancellations and saw no movement by its customers to cancel their flights or book with another airline. Moreover, United kept all its flights flying from Britain to the United States on Thursday, said spokeswoman Robin Urbanski, although they averaged 2 1/2-hour delays because of long lines at airport security stations. All of United's flights to Britain from this country went out on Thursday, she said. The carrier is urging travelers to consult its Web site for more information. American said it canceled three of its 16 planned departures from Britain on Thursday; those flights had been set to fly to Chicago, Boston and New York's John F. Kennedy airport. "A number of reporters have asked us whether we have seen any significant cancellations or booking away from our customers today," American said Thursday. "The answer is no. A check of booking records today shows very few itinerary changes or cancellations. The numbers are virtually insignificant from a statistical standpoint. Not surprisingly, most of the small numbers of changes we have seen involve London." American urged travelers to consult its Web site for more information. SFO spokesman Michael McCarron said all scheduled flights between San Francisco and London departed on Thursday, although with delays. The biggest disruptions came at London's Heathrow airport, the world's busiest airport for international travel, as fliers were grounded by the thousands Thursday when news of the foiled plot broke. British Airways, Britain's largest airline, canceled 400 flights Thursday and expected disruptions to continue today and Saturday. The airline said it expects to operate 60 percent of its short flights from Heathrow today and 75 percent of its long flights. The airline also warned that "flights to and from the U.S. are likely to continue knock-on delays as a result of enhanced security measures and may be subject to possible cancellations." Although the threat to airline recovery plans by the bomb plot must be taken seriously for at least the next several days, some analysts say it is likely to be overshadowed over the long haul by other continuing problems. Oil, for one. Jet fuel has remained stubbornly high-priced since last year, although the price for a barrel of light, sweet crude oil fell $2.35, or more than 3 percent, on Thursday to $74. "I would guess that today's fall in oil prices has more than offset the shock of a terrorist threat," said Ann Heffron, an analyst for Zacks Investment Research. "Don't forget, the airlines are in much better shape than they were before 9/11. So, any impact from terrorism will not be as gut-wrenching as the changes brought by 9/11." The airline industry, while undeniably shaken, will soon recover from th= is latest threat, predicted David Treitel, chief executive of New York aviation consulting firm SH&E. "The strength and resiliency of the business is, I think, going to manage this situation very effectively, so that we won't have much more than the added inconvenience through the next few days," Treitel told the Associated Press. For now, travelers planning to fly between the United States and the United Kingdom should consult the Web sites and toll-free telephone numbers of their carriers for information about airline cancellation policies and real-time flight updates. Additionally, travelers should check the Web sites for airports through which they are planning to fly. The Department of Homeland Security's Transportation Security Administration issued new rules Thursday for checked and carry-on baggage for both domestic and international flights. Effective immediately, "no liquids or gels of any kind will be permitted in carry-on baggage," the agency said. "Items must be checked in baggage. This includes all beverages, shampoo, suntan lotion, creams, toothpaste, hair gel and other items of similar consistency." Exceptions can be made, the agency said, for "baby formula, breast milk, or juice if a baby or a small child is traveling; prescription medicine with a name that matches the passenger's ticket; and insulin and essential other non-prescription medicines." Online resources -- United Airlines: www.united.com -- American Airlines: www.aa.com -- British Airways: www.britishairways.com -- Department of Homeland Security: www.dhs.gov./dhspublic E-mail David Armstrong at davidarmstrong@xxxxxxxxxxxxxxxx --------------= -------------------------------------------------------- Copyright 2006 SF Chronicle