Big Hit Not Expected For Travel Industry

A traveler walks toward Britain's Heathrow Airport yesterday after attacks in London caused heavy traffic and delays in public transportation.
A traveler walks toward Britain's Heathrow Airport yesterday after attacks in London caused heavy traffic and delays in public transportation. (By Lefteris Pitarakis -- Associated Press)

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By Mark Chediak
Washington Post Staff Writer
Friday, July 8, 2005

The U.S. travel industry is not expected to suffer significantly from the bombings in London yesterday, though airlines flying to Western Europe could experience a drop-off in bookings as passengers adjust their plans, analysts said.

For the struggling airline industry, a dip in travel to Europe could hurt recovery efforts because carriers have been benefiting from a recent surge in international travel.

Airline and travel-related stocks fell yesterday. Delta Air Lines Inc. lost 2.9 percent, while AMR Corp., parent of American Airlines, was off 1.2 percent. Marriott International Inc. declined 0.4 percent.

Jamie Baker, an airline analyst at J.P. Morgan Securities, said in a research note that he expected a slight decline in bookings to England over the next six to 10 weeks. "Any widespread aversion to air travel throughout Western Europe would likely have a significant negative effect" on the airlines, particularly Delta, Continental Airlines Inc. and Northwest Airlines Corp., he said. But, he added, it would be difficult to imagine any serious long-term impact from yesterday's bombings.

Leisure travelers have already booked a large portion of the transatlantic summer traffic and are unlikely to change their plans, especially those with nonrefundable tickets, said Raymond Neidl, an airline analyst with Calyon Securities (USA) Inc. He said the slide in travel after the Madrid bombings in March 2004 was small and short-lived.

Hotel chains with properties in London were assessing the potential impact yesterday. John Wolf, a spokesman for Bethesda-based Marriott, said it was too early to tell if the attacks would slow bookings in London.

Travel agents and airlines said they had not noticed a rash of overseas cancellations but expected some people traveling to London over the next few weeks to alter their itineraries.

"People are taking a kind of a wait-and-see attitude," said Maggie Buttweiler, spokeswoman for Carlson Wagonlit Travel Inc., a network of more than 700 U.S. travel agency locations.

Buttweiler said some travelers may wait a few days before deciding to go ahead with a trip overseas. "In general, people want to travel and don't want to cancel their plans," she said.

John Lampl, a British Airways PLC spokesman, said the airline had received "a lot of calls" but had not experienced "mass cancellations" due to the bombings. The airline said passengers on London flights booked through July 15 who were affected by yesterday's attacks could change their reservations without penalty up to two weeks after their scheduled departure.

American Airlines, which offers more than 20 daily flights to London, said it had not noticed a significant number of flight changes or cancellations. The airline is offering passengers on London flights in July the opportunity to change their reservations without a fee.

Airline travel within the United States is not likely to slump because of the bombings, Neidl said. "People may be a little bit more careful and a little more nervous," he said, "but I'm not expecting a big fall off."

Passengers are not shying away from Amtrak, either, according to spokeswoman Tracy Connell. "We haven't heard of any impact to ridership at all," she said. "We're expecting strong bookings over the summer."

U.S. travel is still expected to reach record levels this summer with more than 328 million leisure trips planned, according to the Travel Industry Association of America.

"Timing wise, things could have been a lot worse," said Allen Kay, spokesman for the association. "The vast majority of people have made their plans and bought their tickets."


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