More than 100 of the United States' 468 airports reopened Thursday after implementing new Federal Aviation Administration security regulations. Airports such as New York's LaGuardia Airport and John F. Kennedy International Airport eliminated curbside check-in, forbade passenger jets from carrying U.S. mail, and prohibited bringing any kind of knife on board. (Both airports were closed at 6 p.m. Wednesday "due to FBI activity.)
But in the wake of the biggest disaster in American aviation history is anyone still willing to get on a plane? The immediate answer appears to be that the airline industry will suffer huge financial losses in the short term, as travelers shy away from flight. But in the long run, even this disaster will be shrugged off in exchange for the convenience of air travel.
Some representatives of the travel industry are still maintaining that confidence in air travel remains high. On Thursday, the American Automobile Association (AAA) was reporting that the majority of their customers are keeping faith. "No great masses of people have canceled flights," says Atle Erlingsson, a spokesperson for AAA, one of the largest leisure travel agencies in the country. "People in the Bay Area who need to get to Chicago, for example, can drive, but most are still choosing to fly. As concerned as everyone is, I still think there is trust in the system."
But others predict a major downturn for an industry that's already suffering its worst year since 1991. "We've already got sand in the gears," says Marianne McInerney, executive director of the National Business Travelers Association (NBTA). "This is going to keep slowing things down."
Before the disaster, business travel -- the most lucrative sector of the industry, accounting for 55 to 65 percent of carrier revenue, according to the NBTA -- had already been cut back because of the slacking economy. Now "cancellations are streaming in," says Linda Richter, a professor of political science at Kansas State University who is an editor for the "Annals of Tourism Research." "It's going to be a crushing blow after a very bad summer."
McInerney estimates that the airlines lost $250 million on Wednesday alone. With the new cost of additional security, at least one airline has already decided to get out of the air. Midway Airlines, an already-struggling small carrier based in North Carolina, announced Wednesday that it would cease operations and lay off 1,700 employees. "They made the judgment that the cost of the last couple of days was more than they planned for or could handle, and they decided that they simply can't make it," says Paul Ruden, vice president for legal affairs at the American Society of Travel Agents.
Travel agents are also taking a hit, since refunding tickets means giving up commissions.
"Either we're losing revenue we already took in or we're going to be doing a lot of work for free," explains Paul Farestveit, branch manager for STA Travel in Berkeley, Calif. "It's purely a service industry, so if you can't assess any service charges suddenly you're working for nothing -- you're giving your product away for free."
Travel industry analysts predict that airlines will respond as they have to previous catastrophes -- with price cuts. During the Y2K scare and after plane crashes, carriers have wooed passengers back by offering "serious discounts," says Ruden. "They do this to maintain their market and that's probably what will happen again."
But price cuts will depress earnings in an already desperately struggling industry. And in the wake of the destruction of the World Trade Center discounts may not be enough to reassure vacationers.
Leisure travel is the most unpredictable and vulnerable sector because vacationers have the freedom to decide when they travel and how far from home they venture. "This is just the easiest industry to sabotage, because discretionary travel can always be put off, it can always be to another destination," says Richter.
Business travel will likely bounce back more quickly. Some 44 percent of corporations surveyed one day after the attack indicate that they plan to immediately resume normal travel practices when airports open, according to a NBTA study of 200 companies. On Thursday, at STA Travel in Berkeley, agents were still booking business travel for the faculty and administration of UC-Berkeley, while canceling students' flights. "Business travel will still move forward, although at a somewhat reduced rate," says Farestveit.
Unless further air attacks occur, analysts anticipate a return to business as usual over the longer-term. "A year from now, we will look back on this and the major long-run changes will be heightened airport security," says Colin Camerer, an economist at California Polytechnic State University. "And that's it. After a month or so, airline use will rebound."
The deaths of 266 passengers and crew members on four separate domestic flights within two hours of each other may make U.S. air travelers reluctant to fly at first, but the consensus seems to be that the catastrophe isn't likely to change their habits.
As Ruden puts it, "We think there will be a short blip, then things will return to normal."
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