IE 11 is not supported. For an optimal experience visit our site on another browser.

Airlines low key in U.S. security controversy

Airlines are keeping a low profile when it comes to the furor over U.S. passenger security screening, which will mainly affect leisure customers during the holiday period, not premium paying business travelers.
/ Source: Reuters

Airlines are keeping a low profile when it comes to the furor over U.S. passenger security screening, which will mainly affect leisure customers during the holiday period, not premium paying business travelers.

Airline shares were lower on Tuesday along with the broader market as the Thanksgiving travel crush accelerated. Airline shares closed 1.97 percent lower at $48.25 on the ARCA Air line Index.

Airlines expect to carry 24 million people over the 12-day period that ends early next week, a slight increase over last year.

Passengers have flooded airlines, security agencies and civil liberties groups with complaints that the Transportation Security Administration's full-body scanners and law enforcement style pat-downs violate privacy rights.

Internet-fueled campaigns are urging travel boycotts beginning Wednesday.

Carriers have not reported anything out of the ordinary regarding cancellations in the busiest regions. Wintry weather disrupted some travel in the Pacific Northwest, according to the Federal Aviation Administration.

George Hobica of said airlines should offer refunds to individuals who opt not to fly due to health or privacy concerns associated with airport screening.

Some carriers are weighing refunds in very limited circumstances. Delta Air Lines and American Airlines, a unit of AMR Corp, said they had not changed ticketing policies but normal benefits associated with refundable tickets remain in force.

"The usual guidelines for flexibility apply," Delta spokeswoman Susan Elliott said.

Industry insiders stress the majority of passengers over the holidays are leisure travelers who booked flights some time ago and are motivated to fly despite new security protocols.

Others said airport hassles are part of a "new normal" for air travel since the 2001 hijack attacks prompted an overhaul of airport and airline security.

They also note travelers overall are resilient and also have had to put up with new bag fees, long ground delays and other non-security controversies that aroused consumer anger.

Airlines are viewed as sensitive to security concerns, but have no alternative but to comply with screening requirements, especially at major airports. The TSA has accelerated deployment of full-body scanners at bigger airports.

Helane Becker, an analyst and senior vice president of Dahlman Rose & Co, said she is keeping an eye on forward bookings for post December holiday travel, aircraft traffic and what happens this week.

"Pragmatically, people fly and they're not going to stop. They complain. It's in the news," Becker said.

David Castelveter, a spokesman for the Air Transport Association trade group, said it is too early to "draw conclusions" about whether the security furor would drive travelers away and hurt carriers financially.

U.S. airlines fly more than 700 million people annually.

The industry is in the midst of a financial rebound, reporting strong profits in the last quarter and on track to earn up to $4 billion for the year, United Continental Holdings Inc Chairman Glen Tilton said last week.

Airlines shares overall are up more than 45 percent on the year, benefiting from an improving economy. Investors have reacted positively to consolidation and capacity reductions that have allowed carriers to charge higher fares.

A primary concern is that air travel not alienate business customers, who pay a premium to fly and have underpinned much of the industry recovery in 2010.

"The business traveler prepares for flying. It rolls off their back. They know they have to do it," Becker said.

The National Business Travel Association (NBTA) said its members are adopting a wait-and-see attitude toward the new screening measures. The group notes that leisure customers often do not know what to expect when they reach the airport while experienced business travelers follow a routine.

"They (business travelers) are realistic about the threat to our aviation system and understand the TSA's remit to protect the traveling public," Mike McCormick, the association's executive director, said in a statement.

"However, they are also concerned about security measures that may add delays and disruptions to an already challenging security process."