Fare game

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No industry suffered as much from the Sept. 11 disaster as airlines. At first, the entire industry was grounded. Then, after planes took flight again, airlines had to contend with another wave of consumer consternation caused by a plane crash in New York and a man caught aboard another flight with explosives in his footwear.

And, oh, by the way, there was the recession.

After halting advertising following the crashes, carriers went back on the air with soft, uplifting brand work. Some of that continues , notably in a new American Airlines campaign from Interpublic Group of Cos.' Temerlin McClain, Irving, Texas, where the carrier conveys it's proud to carry that name. But much of post-9/11 airline advertising pitches cheap fares to lure back passengers.

Traffic declines after Sept. 11 have been dramatic. Air Transport Association figures show the industry-health indicator-revenue passenger miles, or RPMs (one passenger mile equals one person carried one mile)-dropped 32.5% last September vs. September 2001. That was followed by sharp RPM declines in October, November and December-21.1%, 17.7% and 13.2%, respectively, compared with those months in 2001. January 2002 saw a 12.8% drop from the same month last year.

Despite more prevalent talk of fears of flying, and increased security measures adding hours to the average trip, experts believe the main impact on airline volume is economic.

"9/11 was a punch, but most of what you're seeing in the industry is a result of the economic downturn," said Frank Werner, an assistant professor of finance at Fordham University's business school and an airline expert.

"Our biggest hurdle has been business travelers that could take a business trip without a second thought," said Tad Hutcheson, director of marketing at AirTran Airways. "Now we're seeing those business travelers having to get approval from their bosses before they travel and in some cases their bosses' boss."

WHICH DIRECTION?

Industry experts say as time passes-without further incidents-passenger fears will subside. A March 4 report from Lehman Bros. predicted airline stocks would post a "strong performance" this year.

"We're optimistic that it will turn around," said Brad Gerdeman, Delta Air Lines' director-worldwide marketing communications. "It's still going to be a very tough year, but it's moving in the right direction." Airlines will get a huge tailwind if the recession has indeed passed.

Overall, airlines have a saving grace: Their role in the business and leisure economy is unique. "There's something about human contact that is undeniably effective," said Abe Novick, senior VP-corporate development of US Airways agency Eisner Communications, Baltimore-echoing a common theme in that airline's and others' advertising. And Mr. Werner said he does not expect longer lines at airports or more onerous security to deter passengers.

"I don't see them as causing enough problems that they're competing with the underlying reason people are flying, which is to see family or do business," he said.

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