The days around this week's Thanksgiving holiday is usually the busiest time of year for US airlines, but instead of a bright outlook, the sector still faces storm clouds.
Dozens of aircraft still sit idle in the California desert as the industry suffers its worst-ever slump.
Air trips of 320km to 640km plunged by 22 percent in the year after the terrorist attacks on the US last year, one industry survey found.
PHOTO: REUTERS
Security-related airport hassles and extra charges have kept millions of passengers off domestic flights, with many opting for more convenient road and train travel instead.
Stricter luggage limits enforced by stinging fees and requirements to show up at airports hours early have also made cars and trains more attractive for many travellers.
But in some good news for travellers, delays were down as flights dropped from 710,000 in June 2001 to 664,000 one year later, according to the Bureau of Transportation Statistics.
Major airlines have laid off tens of thousands of workers and seen their stock valuations sharply cut, in some cases halved.
United Airlines, the world's second-largest carrier, has asked for a government loan guarantee on top of a massive bailout that kept planes in the air after the terrorist strikes.
The Chicago-based carrier has launched a desperate struggle for a US$1.8-billion loan guarantee and presented a recovery plan to slash costs by US$14 billion over five and a half years.
Its competitors, smelling blood, have lobbied against such help, arguing it would be unfair, while powerful Republicans are supporting the company's bid.
If it doesn't get help, the carrier has warned, it might have to file for bankruptcy protection when it faces repayment on US$375 million in debt on Dec. 2.
The entire sector has been hurting as major carriers have sought to compete against discount carriers like Southwest and AirTran Airways, which have severely reduced profit margins.
Airlines have cut customer service, causing complaints about missed flights, lost luggage and poor food to soar 250 per cent since last year, according to the Investor's Business Daily.
The industry was intensely competitive before Sept. 11, 2001, making the terrorist attacks -- which grounded all flights for almost a week and scared millions off planes -- catastrophic for the industry in the US.
In the first nine months of this year, major carriers had 397.4 million passengers -- a year-on-year drop of more than 8 percent, according to industry figures.
And in a dramatic warning earlier this week, the airline's trade association said it might be necessary to nationalize the airlines, the New York Times reported.
The government "must assume the full cost and responsibility for assuring protection of the aviation system against terrorist attack", said Air Transport Association president Carol Hallett.
The trend is mirrored worldwide, the industry group Iata said. Profits of US$3.7 billion in 2000 turned into a US$12-billion loss in 2001, with an US$8-billion loss likely this year.
To stay in the air, US airlines said they have been forced to pile on debt in what is already a highly leveraged industry.
"Just to survive day to day, airlines have taken on massive debt," Don Carty, CEO of American Airlines' parent company, AMR Corp, told the Fort Worth Star-Telegram. "As a result, our balance sheets and credit ratings are deteriorating rapidly."
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