"Airline troubles trickling down"

monday, March 31, 2003

Airline troubles trickling down
Reductions in flights causing headaches for travel agencies
By Lisa Green
The Fort Wayne (IN) Journal Gazette


Carolyn Juergens and Margaret Klingenberger are online frequently, checking
e-mail and using the computer and other resources to keep abreast of the
latest news in their industry.
It's deja vu.

Airlines are scaling back flights. And the speculation that at least one
more major U.S. carrier could file for bankruptcy protection continues.

Just like after Sept. 11.

Juergens and Klingenberger are executives at two Fort Wayne travel agencies.

The slowdown in travel that has many airlines, including American and Delta,
feeling financially strapped is touching them, too.

"We certainly still see interest in travel, but not as much commitment,"
said Klingenberger, president of Covington Travel.

Juergens and Klingenberger are optimistic their agencies will continue to
thrive, but they acknowledge that some small travel agencies may not be able
to survive the latest downturn accentuated by a nation at war.

Juergens' agency last year announced the acquisition of two regional travel
agencies whose owners cited substantial industry changes in the post-Sept.
11 terrorist attack days.

"Obviously it's not our hope that people go under because it's healthy to
have good competition in the area," said Juergens, president of Conference &
Travel.

After Sept. 11, airlines began wiping out thousands of jobs and trimming
flight schedules.

Travel agencies also have lamented the loss of commissions from airlines.

Now comes the war with Iraq.

United Airlines, which is already in bankruptcy, announced earlier this
month plans to reduce its flying schedule by 8 percent starting in April.
The airline also plans to put 3,400 flight attendants and mechanics on
temporary leave.

Delta Airlines, which has cut 16,000 jobs since Sept. 11, 2001, announced
last week that it plans to trim its flight schedule by 12 percent.

And then there's American Airlines. The carrier last week was wrangling for
$1.8 billion in wage and benefit concessions to avoid the bankruptcy trap.
Its stock closed Friday at $1.58 on the New York Stock Exchange, down 94
percent from where it was a year ago.

Changes in the travel industry and the economy have forced many agencies out
of business over the years.

Stan Morse, one of more than 30 chapter presidents for the American Society
of Travel Agents, said the '80s and '90s were much more prosperous for many
in the industry.

"The phones were ringing off the hooks. We were here until 9 o'clock at
night," said Morse, of Marstan Travel in Millbrook, N.Y. "I would say there
are probably 50 to 60 percent of the agencies in business today that were
there 10 years ago, but then again, the ones who are are survivors."

Juergens and Klingenberger say one of the biggest challenges for travel
agencies these days, as airlines work through their woes, is scheduling.

Airlines, in many cases, are not eliminating service to particular
locations. That's a good sign, Juergens said, but they are reducing flight
options.

United, like American, is seeking wage-related concessions from employees,
and Juergens and Morse said they are concerned about what lies ahead for
that carrier.

Klingenberger, of Covington Travel, is trying to remain upbeat. But the
trickle down of changes is making things tougher for travel agents.

"It doesn't make our jobs any easier, and we are getting e-mails daily from
the various airlines saying they are cutting back," Klingenberger said.
"Each agent is watching everyday to try and see if there is going to be some
change and then hop on it quickly."

Travelers who have booked on an airline that is making cutbacks in flights
may face restrictions in getting alternative flights scheduled.

"Our choices may be lessened," Klingenberger said. "Maybe you don't have six
ways to go to New York between 5:30 and noon. You may have only three."

Klingenberger and Morse said travelers who book plane tickets over the
Internet face even more challenges if there are flight cancellations and
they haven't kept up to date with changing airline schedules.

Like Juergens and Klingenberger, Stan Brenneman, a co-owner of Brenneman
Tours & Cruises in Berne, is ready to withstand the constant change in the
industry.

Brenneman, who turned 69 on Thursday, has been in the business 26 years. He
knows it hasn't been kind to some of his former peers.

"We lost two of our close competitors and friends since 9-11," said
Brenneman, referring to travel agencies in Bluffton and Decatur that have
since become part of Conference & Travel.

Brenneman said he doesn't worry much about talk there could be additional
bankruptcy filings by airlines. When they seek bankruptcy protection,
airlines are looking to shed some of their debt and likely stand a better
chance at reducing labor costs. Under bankruptcy protection, he reasons,
they'll keep flying.

Neither United nor US Airways has let filing bankruptcy keep it grounded. US
Airways could emerge from bankruptcy as early as today.

"With bankruptcy, they're using it to their advantage," Brenneman said. "I
don't want to see the airline industry go away because we can't do it all
with trains and buses.

"I think we'll survive," Brenneman said, "but the glory days aren't there
any more."

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