Final Four, conventions help airport weather travel downturn
Since Sept. 11, 2001, airlines have been scrambling to get the industry flying again. But the war in Iraq has airlines slashing operations nationwide.
Louis Armstrong International Airport reported a 4% drop in major airline flights in February and a 2% drop in passengers from the same month last year. March numbers are not yet available, but airport spokeswoman Michelle Duffourc said there has been no change.
New Orleans is in its peak festival season and playing host to a major sporting event with the Final Four men’s Division I basketball tournament.
It’s hoped the Final Four will have a positive impact similar to Mardi Gras when 20,000 travelers passed through the airport on Ash Wednesday, March 5.
The Air Transport Association of America Inc., a trade organization for major U.S. airlines, projected 2003 industrywide losses to reach $10.7 billion. The Washington, D.C.-based organization also projects a loss of 2,200 daily flights and 70,000 jobs this year.
U.S. airlines have lost $18 billion since the 2001 terrorist attacks, according to the Air Transport Association’s March report. The airline industry lost $13 billion and cut 25,000 jobs as a result of the Gulf War of 1991.
The result of such enormous losses has been predictable. United Airlines and USAirways have filed for chapter 11 bankruptcy. USAirways recently exited but now American Airlines is struggling to avoid filing.
Last week, Congress proposed a $3 billion relief package for the industry, which President Bush criticized as excessive.
The major airlines serving New Orleans are belt-tightening, too.
Continental Airlines announced last week it will cut summer flights by 2% nationwide. The airline has not yet determined if it will cut flights in New Orleans.
Last month, Continental Airlines said it would lay off 1,200 workers in a move to save $500 million. Cuts will be made across the system proportionally but there is no specific breakdown yet on how they will affect each individual community, said spokeswoman Julie King. Continental employs 125 workers in New Orleans.
Southwest Airlines has held onto its approximately 280 employees in New Orleans since Sept. 11, 2001, and in 2002, added 6,000 employees nationwide, said Southwest spokeswoman Angela Vargo. With 60 daily departures, Armstrong’s largest carrier does not anticipate reducing flights, Vargo said.
In May, Midwest Airlines, formerly known as Midwest Express, will discontinue its one daily flight servicing New Orleans and Kansas City due to severe financial difficulties.
Delta Airlines added seven daily nonstop regional flights between New Orleans and Dallas this week, responding to passenger demand, said spokeswoman Peggy Estes. In May, Delta begins service between Alexandria and Lafayette and Atlanta and Dallas through Delta Connection carrier Atlantic Southeast Airlines. But the airline has laid off 16,000 employees since the terrorist attacks, though Estes said Delta did not have employee counts broken down by city. Last week Delta announced a 12% reduction in overall operations due to a decline in passenger demand resulting from the war, Estes said.
Airport officials are also preparing for a downturn should national problems trickle down south, said Roy Williams, director of aviation at Louis Armstrong.
Officials are re-evaluating the airport’s budget for the second half of the year, trying to determine where cuts can be made if need be. Armstrong has added between $100,000 and $150,000 a month on security-related expenditures, Williams said, but now the federal government is reimbursing the airport about $70,000 a month.
Air travel is down about 3.4% from 2000; parking and rental car revenues have also been slightly affected, he said.
Williams is concerned that if the war lasts another four to six weeks, it may hurt late spring travel. Between mid-May and June, fewer people fly into the airport and more start flying out. Williams projects a $4 million loss if there is a 20% drop in passenger traffic due to the war.
Communities for Economic Strength Through Aviation, a Washington- D.C.-based non-partisan group that monitors the airline industry, reported in a 2000 study that Louisiana’s aviation industry contributes $12.5 billion, or 12%, to the state’s gross domestic product. The industry has created 163,000 jobs statewide and $2.8 billion in personal earnings. If a disruption in air service causes a 25% reduction in benefits, Louisiana would lose $8.6 billion per day in GDP and $1.9 billion a day in personal earnings.
New Orleans tourism officials reported late last month that no venues are closing, no major events are canceling and the majority of hotels polled reported no group cancellations.
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