By:Cindy J. Roth
The airline industry decline resulting from the Sept. 11 terrorist attacks on the World Trade Center and Pentagon is grounding Bellmore travel agencies' earnings. Agency owners say their profits are plunging, as many worried clients cancel vacations out of fear.
"There have been a lot of cancellations and virtually no new bookings," said Bart Peluso, owner of Travel with Joy on Merrick Road. "There have been more cancellations than [flights]. We're in a fall-off right now. Some people are so scared."
Ellen Lassman, co-owner of Carlson Wagonlit Travel on Bedford Avenue, said her agency has had several cancellations, but not as many as she imagined it would.
"Most people are traveling to the Caribbean on cruises, so they feel safe," Lassman said. "There are some people who express fear [of flying], but most had fears already. This just multiplied their fears."
Many people are postponing vacations, some even until next year. Sy Lassman, co-owner of Carlson Wagonlit, believes travelers are waiting to see if the country goes to war. War would certainly hurt the travel industry, including local agencies.
"If [we go to] war, I can't foresee what will happen to our business," Ellen Lassman said. "Personally, I hope it can be settled more peacefully."
Airline-industry cutbacks are forcing Carlson Wagonlit Travel to rebook cancelled flights. Ellen Lassman said no one air carrier is canceling more flights than others, but with many personnel cuts, airlines are consolidating flights with other airlines or airports.
"They've lost billions of billions of dollars," Ellen Lassman said. "I haven't lost millions, but I'm losing."
The airlines recently cut travel agencies' commissions from 10 percent of the ticket price to 5 percent, with a cap of $20. That was bad enough, Ellen Lassman said. At the same time, more people are buying tickets off the Internet, hurting travel agencies. Lassman, however, said that people should be required to buy tickets in person, especially considering the recent terrorist attacks. Requiring people to buy tickets in person is a first line of defense against terrorism, she said.
To quell passengers' fears of flying, the Federal Aviation Administration has increased security at airports by modifying check-in and screening practices, increasing random checks, banning knives beyond the airport screening point, establishing new aircraft search requirements and calling for high visibility of armed and uniformed law-enforcement officers at airports, according to the Air Transport Association.
Leo Mullin, chairman and CEO of Delta Air Lines, testified at a recent Congressional hearing over the airline industry's plight. He said passenger demand for flights since airports were shut down Sept. 11-14 has been weak, and revenues among the airlines are expected to drop sharply in the coming months. At the same time, rising insurance premiums for the airlines and the cost of installing new security devices should only increase the cost of doing business.
"These financial blows are coming fast and furious to an industry that, even in good years, faces intensive capital demands and razor-thin profits, and that was already projecting losses for the year," said Mullin on Sept. 19.
Last weekend, President Bush OK'd a $15-billion bailout package for the airline industry, including $5 billion in subsidies and $10 billion in guaranteed loans, but this package will be of little help to travel agencies.
