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Sat, Aug 12, 2006 - Page 10 News List

Analysts optimistic despite air setbacks

RESILIENCE Industry consultants pointed out that the airline business had weathered previous storms in view of concerns following Thursday's foiled terror plot

AP , ATLANTA

Elliot Holroyd tries to finish his bottle of water before checking in for his flight home to London at Tampa International Airport in Florida on Thursday. US officials banned passengers from carrying nearly all liquids and gels onto flights.

PHOTO: AP

The ink barely dry on second-quarter results showing fuller planes and profits some hadn't seen in years, airlines are again being tested -- this time by a foiled terror plot that is sure to make passengers uneasy about flying.

The financial toll on the carriers and whether they will have to scrap their higher ticket price strategy depends on how long the threat lasts, analysts and industry consultants said on Thursday.

But, they pointed out, the airlines have been able to weather such upheaval before.

"Just when they've gotten up and are walking, something like this knocks them down again," said Terry Trippler, an industry expert in Minneapolis.

"It's going to be difficult the next 48 to 72 hours, but it will settle down. It always does," he said.

Advanced bookings have been strong and a number of airlines began offering fare sales this week to help keep seats filled during the traditionally slow early fall season.

That should help the airlines withstand a big financial impact from the terror threat, experts said.

"This industry, which is still trying to recover, doesn't need the effects that we might have here," said David Treitel, chief executive of aviation consulting firm SH&E in New York.

That said, Treitel noted this isn't the first time the industry has had to deal with terror threats or actual attacks.

"The strength and resiliency of the business is I think going to manage this situation very effectively so that we won't have much more than the added inconvenience through the next few days," he said.

Shares of some major airlines sank, but analysts said that the main impact on airlines will come immediately from the cost of canceled flights and in the longer term from extra expenditure on security.

The International Air Traffic Association said that it was still too early to tell what effect the terror plot would have on the air industry.

A spokesman said Thursday's events could not be compared to the terrorist attacks five years ago in the US that sent the air industry spiraling.

"We need to remember on Sept. 11, we had four aircraft go down and a huge number of casualties," spokesman Anthony Concil said.

"In this case, we saw that the security system worked. There was no aircraft that suffered a breach of security. No one has lost their life," he said.

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