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Challenge: getting fliers to fly
©Associated Press
© St. Petersburg Times, CHICAGO -- With the traveling public still fearful after this month's airborne terrorist attacks, the airline industry faces a daunting task in luring customers back, analysts said. There is a sense in the industry, where most flights are only one-third to one-half full, that incentives used in the past to fill aircraft won't work until public confidence in airline security is restored, they said. "The airlines could give tickets away and people won't get aboard because of the fear," Michael Wascom of the Air Transport Association said Monday. "Restoring passenger confidence in the security of the system has to happen first." In the past, the airlines could rely on the tried-and-true method of fare sales, promoted in the media, to fill seats. But many customers could find that offensive, analysts say. The only airline ads published since the attacks have been ones of sympathy for victims. "They are in a quandary," said Joe Brancatelli, a columnist for Biztravel.com. Air fare sales "would look incredibly tacky while there are bodies still buried in the smoldering wreckage of the World Trade Center." That doesn't mean airlines won't try. Southwest Airlines has lowered fares, a move matched by several airlines, including American, American West, Delta and United. "In this environment, we can use all the passengers we can get," said John Hotard, a spokesman for American, which usually doesn't match Southwest's sale fares. The industry had fallen into unprofitability months before Sept. 11, when hijacked airplanes crashed into the World Trade Center and the Pentagon and in Pennsylvania. But the attacks made the industry's survival more difficult, prompting huge layoffs and a multibillion-dollar government bailout. The bailout could be a hindrance to lower fares, airline consultant Terry Trippler said. The bailout includes $5-billion in compensation for losses stemming from a two-day aviation shutdown after the attacks and the decline in business since service was restored. The remainder is for loan guarantees pegged to higher insurance premiums and security costs. "It would be tacky to go to Washington and beg for money and then announce a clearance sale at home," Trippler said. Countered Robert Mann of RW Mann & Co., an airline consulting company: "Having just gone to the trough for subsidies in Congress, I would say it's difficult for (airlines) to maintain a very high, traditional fare structure." Wascom of the Air Transport Association said the industry instead will reassure the public that the air system is secure, and security measures will become more stringent. He said the industry will mount a campaign similar to that when Y2K fears were high in the public's mind. "It was a time when every industry was faced with reassuring the public that necessary steps were taken to ensure safety," he said. "The industry's message will be the steps taken to ensure safety -- that the only reason commercial aviation resumed flying was because of the fact the system was safe and secure. And that additional security measures will be taken." The industry will be hammering that message home in coming weeks with television and newspaper ads, he said. But it will be a difficult task, Brancatelli said. "I have flown four times since the attack," he said. "And never have I seen so much fear. Even frequent fliers, people who should know better, are afraid to fly." Inevitably, the pressure to fill seats will prompt airlines to offer special fares, Trippler said. "There will be covert ones, under the radar," Trippler said. The airlines will inform frequent-flier program members of special fares or post lower prices on their Internet sites, enabling them to hold sales without shouting it from the rooftops, he said. Both Trippler and Brancatelli say airlines will know the fear of flying is easing if demand picks up around the Thanksgiving holiday, traditionally one the industry's busiest periods. "That is when everybody will want to go home," Brancatelli said. "If people aren't willing to do that, we will have a real problem in this country." - Information from Bloomberg News was used in this report.
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From the Times Business report
From the AP
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