War shakes United, but Aspen flights hold steady
War in Iraq and fear of terrorism are placing additional stress on United Airlines, Aspen’s key economic link to the outside world. United Airlines said Friday it is reducing its worldwide schedule by 8 percent because of the military conflict in Iraq, which has prompted a 40 percent drop in recent worldwide bookings. “We saw a drop in future bookings as a result of the threat of war, and we expect this to continue with the onset of war itself,” said Greg Taylor, United’s senior vice president of planning “The airline industry is already a casualty of the war on terrorism,” the Association of Flight Attendants said in a statement. The union represents United’s flight attendants. “Fuel costs skyrocketed as tensions built in the Middle East and revenues are down due to fewer people flying because of the increased threat of terrorism during war.” So starting April 1, United will cut 104 U.S. domestic flights from its schedule and on April 6 the airline will trim its international schedule by 20 flights.United will reduce, but not eliminate, service to Amsterdam, Frankfurt, London, Tokyo, Paris, Taipei and Brussels. It plans to continue serving all of its domestic markets, albeit with fewer flights. After the reductions, United will operate 1,574 mainline flights and 1,478 United Express flights systemwide. This winter, United flew 12 flights between Aspen and Denver International Airport during the week and 14 flights on weekends. Starting on April 7, United Express will be flying five flights a day between Aspen and DIA, which is a normal off-season schedule. The schedule for this summer includes nine flights a day, one less than last summer, a change in place before Friday’s announcement by United. Bill Tomcich, the president of the Stay Aspen Snowmass central reservations agency, said that while this summer’s schedule offers one less flight, the schedule has been shifted to allow for better flight connections in Denver. The real question for Aspen’s air service is how well United, and other American airlines, will fly through the war in Iraq. Delta Air Lines, the nation’s third-largest carrier, said this week it would shrink its network by about 12 percent, reducing service domestically and internationally as a result of fewer travelers since the war began in Iraq. The cutbacks at Delta followed similar moves made last week by Continental Airlines and Northwest Airlines, which said it would lay off 4,900 employees and trim its flight schedule by 12 percent. And the airlines are asking Congress this week for federal assistance, including up to $9 billion in tax cuts. In Chicago, the chairman of United’s branch of the Air Line Pilots Association asked for emergency relief from the “crushing taxes and costs of security levied on the airline industry.” But no aid was proposed for the airlines in the $75 billion war-spending bill crafted at the White House on Monday, dashing the hopes of some industry officials. Most of the money in the Bush administration bill would go to the Department of Defense. The White House is not inclined to support a major bailout, according to The Associated Press, and is willing to let market forces shape a restructuring if necessary. But the market is now being shaped by war. According to the Air Transport Association, the trade association for commercial airlines, this war with Iraq has caught the airlines in a far more precarious position than the first Iraq war in 1991. In the last Gulf War, the airline industry was strong economically, reporting net profits from 1984 through 1989 of $3.9 billion. But air traffic plummeted and it took the airlines four years to recover from a war lasting fewer than 50 days. In this war, the airlines have been battling through fears of flying, a struggling economy, and new security costs. Before the war, the U.S. airline industry expected to lose $7 billion in 2003. Now the industry is saying the war could cause losses of between $11 billion and $13 billion. Along with its schedule reduction, United is putting an unstated number of employees on temporary unpaid leave. “Our number one priority is to continue to operate a safe and reliable airline,” said Sara Fields, United’s senior vice president of “people services and engagement.” “However, we are at a point where we must curtail or delay all work not critical to the company’s safe operation or successful emergence from bankruptcy,” she said. In its bankruptcy proceeding, United is warning it might have to liquidate if it can’t cut labor costs. The hotel industry’s troubles were also apparent Monday as Starwood Hotels & Resorts Worldwide Inc., owner of the St. Regis, Sheraton and Westin brands, withdrew its first-quarter and full-year earnings forecasts. The news sent its stock price tumbling. The White Plains, N.Y.-based company said it was surprised by the “significant deterioration in business” as a result of worsening geopolitical conditions. And Bjorn Hanson, a lodging sector analyst with PricewaterhouseCoppers told the Los Angeles Times Monday that “the markets being penalized are those with a higher percentage of international travelers and those with a higher percentage of air travel.” But it is hard to tell yet if travel to Aspen will be directly affected by the Iraq war. Tomcich said that the next few weeks are typically the slowest weeks of the year in terms of people calling to make reservations, as the ski season essentially ends next week for most destination skiers, and summer travelers aren’t booking trips just yet. “There is never a good time to have a war, but as it relates to our business, the impact is minimal,” Tomcich said. “If it had to happen, it couldn’t have happened at a better time for our resort.” However, Tomcich is carefully watching the airline industry. “We are definitely holding our breath,” he said. “But I don’t think we are just going to wake up one morning and United will be gone.” Tomcich said if the airline’s failure was imminent, there would likely be more drastic steps taken such as half-price fare sales. On the other hand, it the airline does fail, Aspen can certainly expect to feel it. “Should United fail, there is no question there will be significant short-term disruption,” Tomcich said.
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