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Despite full holiday flights, airlines still struggle

THE BALTIMORE SUN

Appearances can be deceiving.

While airports are jammed with Thanksgiving travelers, airlines are operating far fewer flights than in holidays past, and ticket prices are lower than they have been in the past 20 years.

As a result, the Air Transport Association said, many flights appear full "even though overall passenger volumes are still running 10 [percent] to 15 percent below 2000 levels."

Not since 1983, when the average price for a 1,000-mile trip dropped to $104.57, have airfares been so low.

Industry officials said passengers paid an average of about $110 for a ticket to grandmother's house this year. Two years ago, the same ticket would have cost $150.

"There is a crisis in the industry," said Donald Carty, chairman and chief executive of American Airlines. "Most carriers are planning less capacity for 2003 than they had in 2002."

Still, some find it difficult to believe that airlines are in trouble.

"I think they are doing pretty good, and there are a lot of people on every flight," said Jordan Taylor, 19, a student at Presbyterian College in Clinton, S.C., as he waited for his bags at Chicago's Midway Airport.

However, airline officials said that despite the heavy Thanksgiving traffic their problems are real.

Many flights might be full, said Joe Hopkins, a spokesman for United Airlines, "but if people are just looking at that they might conclude that things are fine, but that masks the reality."

US Airways, one of the nation's seven largest airlines, is operating in bankruptcy, while United, the nation's second-largest, says it will file for bankruptcy if it isn't granted a government loan guarantee.

US Airways said Tuesday that it would lay off an additional 2,500 people over the next three months, and American Airlines warned this week that it might be forced to seek work-rule changes or wage concessions from workers.

The numbers are stark. United is operating 25 percent fewer flights than it was before last year's terrorist attacks in New York and Washington, while American Airlines, the world's largest carrier, is operating 11 percent fewer flights.

The transport association, a trade association representing many of the nation's largest airlines, is projecting industry losses for the year exceeding $9 billion.

In the first nine months, losses amounted to $6.5 billion.

Amanda Vogt and Grace Aduroja are reporters for the Chicago Tribune.

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