Attacks may threaten lucrative transatlantic fares

After Jayne Levinson, a teacher from Marlboro, New Jersey, heard about the London bombings on Thursday, she said she was "very scared." But despite pleas from her daughter, Elissa, 14, to cancel their British Airways flight to London from Newark, she decided to go.

"I feel that it's safer now than before," Levinson, 42, said on Thursday while awaiting the flight at Newark Liberty International Airport.

"It's not our time to go, and God is on our side. And we have to think positive," she said.

The airline industry is trying to think positive, too. But on Thursday, that did not seem easy.

European routes are among the airlines' most profitable. And even though London's airports remained open throughout the attacks, the bombings could have a deeper impact -- at least in the near term -- on the airline industry than last year's train bombings in Madrid did.

London's airports feed more traffic to the rest of Europe than those in Madrid do. Industry officials and analysts worried that high-paying business travelers would postpone trips, afraid that what happened in the British capital was only the beginning of a wave of terror attacks.

"Carriers like American, Continental and Northwest, which have a lot of flights going to London, are going to take a hit," said Michael Boyd, president of the Boyd Group Inc, an aviation consulting business. He estimated that bookings to London by the nation's airlines would drop 3 percent to 5 percent immediately after the attacks.

"It will be a dent in the fender, but not a big enough dent to send them into bankruptcy," he said.

Although the setback is unlikely to do permanent damage to an improving airline industry, company executives want to make sure that the dent to their business is small and short-lived. So, a number of airlines flying to Europe loosened their cancellation policies on Thursday to accommodate transatlantic travelers with second thoughts. Airlines waived some cancellation fees and issued vouchers for future flights to passengers who wanted to stay home. Although few cancellations were reported, analysts expect more.

"It's unfortunate for the airlines, because the transatlantic has been one of the bright spots in their business, and we're right in the middle of the principal travel season for flying to Europe," said Philip Baggaley, a senior airline credit analyst at Standard & Poor's.

Andrew Frank, a communications consultant from New York, was scheduled to fly to Moscow on British Airways on Thursday afternoon, with a stopover in London.

"I heard that there might be some disruptions in London, and I didn't want to take a chance," he said. So he paid US$2,000 for a direct flight on Delta Air Lines.

Business travelers appeared to be reacting to the bombings with greater concern than vacationers.

Robert Burke, a technology consultant in Miami, is set to vacation in Ireland next month with his son and daughter. He said the bombings had the opposite of their intended effect.

"When I heard about what happened in London, I said to my son, `Let's go to London to show our solidarity,'" he said.