Steve Anastasi canceled a family vacation to Washington, after his 8-year-old daughter worried that terrorists might fly their plane into a building. The 39-year-old software consultant decided to wait until after war ends in Iraq.
Rick Penn, a vice president at Hutchinson Technology Inc, a Chicago manufacturer of disk-drive components, said he was staying off airplanes because he feared the global spread of severe acute respiratory syndrome, or SARS, a deadly infectious disease.
The airline industry just can't get a break, and there's more pain ahead.
"I've never seen it so bad for so long with a variety of new factors that the industry has never had to confront before," said David Stempler, president of the Air Travelers Association, a consumer group. "SARS, war, terrorism and fuel prices are all pieces which roll into lower consumer and business confidence."
US airlines lost a record US$11.3 billion last year and said losses could reach US$10.7 billion this year without government aid.
UAL Corp's United Airlines, the second-largest US carrier, is operating in bankruptcy. US Airways Group Inc emerged from bankruptcy last month. AMR Corp's American Airlines, the world's biggest airline, plans to reduce pilot pay 23 percent on May 1 and cut as many as 2,500 jobs in an agreement with unions to help avoid bankruptcy.
US airlines were already suffering from the weak economy when the terrorist attacks occurred on Sept. 11, 2001.
Their business still hadn't recovered when the Iraq war broke out last month, discouraging travelers and forcing airlines to cut flights by as much as 12 percent in the first week after the conflict started.
"If you're glued to the TV set you're not going to the store and you're not making trips," said Nick Redfield, analyst for Banc One Investment Advisors, which has US$100 billion under management and owns Southwest Airlines Co and Alaska Air Group Inc shares.
Then the outbreak of SARS has cut travel demand even more.
The war alone may cost the industry US$4 billion, 70,000 more jobs on top of the 98,000 cuts since August 2001, and a reduction of 2,200 daily flights on top of 2,100 already eliminated since before the 2001 attacks, according to the Air Transport Association, an airline trade group.
Passenger traffic on US airlines during the week ended April 6 fell 17.4 percent compared with the same week last year, the transport association said. Travel on routes to Europe fell 25 percent and traffic on flights to Asia was 26 percent lower.
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