Air travelers’ skittishness may return

Associated Press

NEW YORK — Just as airlines began luring back passengers with tighter security and cheaper fares, analysts and travel agents say U.S. air strikes in Afghanistan threaten to halt the fragile momentum the industry fought hard to regain in the weeks following Sept. 11.

War-related ups and downs are not new to the industry, analysts said, noting the decline in air travel and airline stocks during the Gulf War. That period in the early 1990s was also marked by a nationwide economic downturn.

"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.

The uncertain mood was reflected on Wall Street as airline stocks were mixed. Shares of the six-largest U.S. carriers have staged a mild comeback since dropping about 40 percent each on the first day of trading after the attacks in New York and Washington, but as of midday Monday remained between 25 percent and 56 percent below pre-attack levels.

Precise figures on airline passenger volumes since Sunday’s attacks on Afghanistan were not immediately available, although 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 country’s poor economic outlook. The problem worsened after the attacks spurred fears among the traveling public about aviation security. Once the industry cut capacity by 20 percent, domestic flights were still half empty by the end of September.

The situation began improving, though, as carriers offered fare incentives to business and leisure passengers and the evidence could be found at airports, where strict security measures forced travelers to endure long lines.

Shares of airlines ticked upward during late September and the first week of October as investors viewed the stock prices of certain carriers to be undervalued.

But now, with President Bush’s military response to terrorism under way, industry watchers said the slowly dissipating hesitancy toward travel could be stalled, at least temporarily.

"In the immediate future, people are going to be wary of flying," said Bob Abrams, a travel agent at Valerie Wilson Travel Inc. 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."