Airbus crash may not be big deterrent
By Mary Schlangenstein
Bloomberg News Service
Fort Worth, Texas — U.S. airlines and travel agents say a decline in reservations since Monday's crash of an American Airlines jetliner mirrors those after previous air accidents, signaling that damage to demand may be limited.
The crash in New York came two months after sales already fell after terrorists used hijacked jetliners to attack New York and Washington. Initial findings indicate this week's accident wasn't related to terrorism. As a result, the post-Monday slide in ticket demand shows signs of bottoming and following a typical post-accident pattern of dissipating next week, companies said.
Delta Air Lines Inc. had a "slight decrease" in bookings just after the crash, and the effect doesn't appear to be lasting, spokesman Tom Donahue said. Northwest Airlines Corp. had "no measurable impact" on customer reservations or cancellations, spokesman Kurt Ebenhoch said.
The crash, which killed all 260 people on an Airbus jet, came less than two weeks before the Thanksgiving holiday and as demand began to rebuild after the hijackings lowered airline sales. Even if the post-crash effect dissipates, Thanksgiving travel is forecast to fall as much as 27 percent below last year because the attacks sped up a slide in travel in a slowing U.S. economy.
"One would have expected to see, no matter what the cause, at least a couple of weeks or months of somewhat depressed air travel demand," said Jake Fuller, a Thomas Weisel Partners LLC analyst who covers businesses such as Sabre Holdings Corp., the largest travel reservations company. "The fact that we appear to not be seeing that suggests something about the consumer and the resiliency of the consumer."
Shares of AMR Corp., the parent of biggest carrier American Airlines, have declined 37 percent after the Sept. 11 hijackings. American owned two of the hijacked planes. AMR rose 81 cents to $18.75, while the Bloomberg U.S. Airline Index gained 3.9 percent to 73.65.
Bookings at AMR eased after the crash Monday.
"Before Monday, we were seeing strong bookings for holiday travel for Thanksgiving," said Julia Bishop Cross, an AMR spokeswoman. "Christmas is still a little far out to get a good read on, but it was looking pretty good, too."
The AAA travel group forecasts that 87 percent of travelers will use cars this Thanksgiving, up from 83 percent last year and the highest level since the group started compiling statistics. All forms of travel will slide 6 percent, with airlines accounting for most of the decline, the group said.
"Our bookings (Tuesday) were fairly strong, particularly as news got out that this appears to be an accident and not a result of terrorism," said Scott Kirby, executive vice president for sales and marketing for America West Airlines. "I'd speculate our bookings will get a little further behind over the course of the next week or two, and then rebound" to pre-Sept. 11 levels.
Major airlines reported few passengers canceling their travel plans after Monday's crash. Southwest Airlines, the largest low-fare carrier, hasn't seen an increase in refunds or sharp decline in bookings, spokeswoman Linda Rutherford said.
The crash may affect only those who have been indecisive about travel because of fear or who have been searching for lower fares, said Merrill Lynch analyst Michael Linenberg.
"Potential air travelers sitting on the sidelines trying to decide whether to fly over the holidays, you may have lost some of them," he said.
Carlson Wagonlit Travel, which franchises about 1,100 travel agencies in the United States, said about half its offices had a decline in bookings since Monday. Holiday bookings are about 15 percent below last year, said spokeswoman Gretchen Kreske.
Travelers feel "more comfortable to know that it's not terrorism related," she said.
