Strike effect on business, vacations: so far, it's fizzled
Someone snuffed the fuse on the air traffic controllers' bomb without telling them. Although the strike has inconvenienced air passengers and cost businesses unknown millions, its economic effect clearly has not been as shattering as the union expected.
The stage seemed set for disaster. Over 800,000 people travel by commercial airliner every day. Over $100 million a day is spent on flying people and cargo.A great number of companies -- from lobster shippers to computer distributers -- depend on air travel for fast transportation. And 90 percent of first-class mail is carried by air. No one disputes that the losses already incurred by the walkout of 13,000 of 17,000 members of the Professional Air Traffic Controllers Organization are enormous. tom Germuska of United Airlines predicts his company will lose $4 million each day the strike continues. The Air Transport Association projects losses of $10 million a day if airlines run at two-thirds capacity.
The strike comes at a poor time for the 12 major commercial airlines, which together suffered $168 million in losses in the first quarter and barely broke even in the second quarter, according to Robert Joedicke of Lehman Brothers Kuhn Lobe Inc.
The summer months are the peak season for airlines, says Ida Simmons of the US Travel Data Center, a national nonprofit organization for tourism research. Airline ticket sales typically rise by 10 to 15 percent over a normal month. Sixteen percent of all vacation travel occurs in August alone.
But at least in part because of advance planning by the Federal Aviation Administration (FAA) and the airlines, air carriers have been able to cut their losses by determining for themselves which flights to cancel. The FAA contingency plan requires airlines to cancel half of their flights at peak times in 23 of the busiest airports. The airlines can cut redundant flights or little-used routes. United Airlines, for example, canceled a nonstop flight from Boston to Los Angeles because it covered the same route with a flight that touched down in Chicago. Many of the flights canceled were not fully booked.
Beside the airlines, passengers and businesses relying on air travel ought to be feeling the pinch. But so far, most have not been unduly inconvenienced. FAA administrator J. Lynn Helms said 72.5 percent of all scheduled flights were in the air Tuesday; 83 percent of the flights for the nine largest carriers took off. Delays, when they did occur, averaged 25 minutes.
"Vacationers are more price-sensitive and less time-sensitive than those traveling on business," observes Paul Hall at the US Travel Service in the Department of Commerce. "During an extended strike, you would expect to see a higher percentage of business travel than vacation travel."
Vacationers often can delay their trips, change their destinations, or find another mode of transportation, while business people cannot. Also, during a strike, airlines would discontinue discount fares, which appeal more to individuals than to corporations.
A strike could devastate the perishable- goods industries, such as fresh fruit, seafood, flowers, and pharmaceuticals. But many companies, such as Sunkist Inc. and Perdue Farms, are moving shipments adequatel by refrigerated trains, trucks, or ships.
Vacation resorts are also vulnerable target, especially for remote areas served by commuter or chartered flights, which have lowest priority undet the FAA's contingenc plan. But at Katama Shores Inn on Nantucket Island off the Massachusetts coast, it is business as usual.At the Falmounth, Mass., Sheraton Hotel on Cape Cod, there were no cancellations Tuesday; in fact, the amount of walk-in business doubled.
"As long as the weather holds out and we stay away from heavily congested airports, we're in fine shape," says Tom Monroe of Hyannis Aviation. Below 18, 000 feet, pilots can navigate visually and are not subject to air traffic controls. Most commuter flights, which average one-half hour, fly below 18,000 feet. Because it consumes more fuel, low-altitude flight is too expensive for commercial flights of more than 90 minutes.
According to Joy Sabol of Flying Tiger Inc., the largest air cargo carrier in the country, the company has operated 95 percent of its flights since the strike began. "Its's no picnic, of course, and we're losing money, but as long as they maintain the high level of staffing at the towers, it won't devastate us."
Federal Express has fared even better. Not one of its flights has been cut. Both Flying Tiger and Federal Express fly at night when passenger flights dwindle.