Air strikes on Afghanistan could stall airline industry's fragile momentum
Monday, October 8th 2001, 12:00 am
By: News On 6
NEW YORK (AP) _ The U.S. air strikes on Afghanistan threaten the nation's airlines just as they were beginning to lure back travelers with tighter security and lower fares.
``In the immediate future, people are going to be wary of flying,'' said Bob Abrams, a travel agent at Valerie Wilson Travel in New York. ``But I've seen this stuff go away in a month. Thanksgiving is going to be a bellwether. It's the biggest travel day of the year.''
The uncertain mood was reflected Monday on Wall Street, where airline stocks were mixed.
Precise figures on the number of passengers since Sunday's first round of attacks on Afghanistan were not immediately available, though David Stempler, president of the Air Travelers Association in Washington, said: ``It doesn't take too much to get people uneasy about travel.''
Even before Sept. 11, airlines were having difficulty filling seats because of the weak economy. The problem worsened after the terrorist attacks caused a fear of flying.
The stocks of the major U.S. airlines dropped about 40 percent on the first day of trading after the attacks, and the carriers announced tens of thousands of layoffs and cut capacity 20 percent.
The situation began improving, though, as airlines offered fare incentives to business and leisure passengers, and security was tightened with the use of National Guardsmen.
But now, with President Bush's military response to terrorism under way, the industry's comeback could stall, at least temporarily.
``The comeback may be slowed down now,'' said Ray Neidl, airline analyst at ABN Amro in New York. ``The momentum should come back, though, as long as there isn't another attack'' on U.S. soil.
On Wall Street as of midday Monday, major airlines remained between 25 percent and 56 percent below pre-attack levels.
AMR Corp., the parent of American Airlines, was up 31 cents at $21.17. United's parent, UAL Corp., was up 24 cents to $18.34. Delta climbed 45 cents to $27.73. Continental declined 59 cents to $17.41, US Airways fell 27 cents to $5.51, and Northwest dropped 35 cents $12.70.