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Airport Security Rules a Mere Blip for Business Travel

Posted on: Thursday, 17 August 2006, 14:55 CDT

By Kyle Peterson

CHICAGO (Reuters) - Tighter airport security in the wake of a foiled bomb plot in Britain last week sent big-spending business travelers rushing to private jets in hopes of avoiding long delays and luggage restrictions.

But experts say the passenger migration from commercial airlines to private services will be short-lived as long as new government-imposed restrictions don't permanently impede the ability of travelers to work in airports and on planes.

Business travelers, who often pay more for last-minute bookings and premium in-flight services, are a key revenue source for major airlines like AMR Corp's American Airlines and UAL Corp's United Airlines, which have invested heavily in business cabin improvements.

"We have had some indications that right now there are some shifts," said Caleb Tiller, spokesman for the National Business Travel Association. "But we expect those to be temporary."

U.S. and British airports heightened security last Thursday after British authorities said they foiled a plot to bomb airplanes traveling to the United States.

The tighter security resulted in long security screening lines and restrictions on carry-on luggage.

Luggage restrictions vary from country to country and have changed several times in the last week. Security was tightest in Britain, where the alleged plot was uncovered. All carry-on baggage on flights from Britain to the United States was initially banned.

Private jet services saw a surge in business from travelers who could afford them. One expert said that if the inconveniences become the norm, airlines catering to business travelers could face persistent competition from private jet services.

"If things really are going to settle out in terms of limiting business traveler productivity, people are going to start looking for alternatives," said airline consultant Robert Mann.

However, the top two U.S. airlines, American and United, said there are no signs that their operations have been permanently hobbled by new security measures and that bookings remain stable.

"We're still running very high load factors," said AMR spokesman Tim Wagner. "I think customers have taken this in stride."

One private jet service said the spike in its business following the terror scare resembled the temporary spikes it enjoys when natural disasters disrupt airline operations.

"We did get a handful of new customers out of the deal," said Greg Johnson, chief executive of OneSky Jet Network. He said that in the first five days following news of the bomb plot, OneSky flew about 30 charter flights, compared with 20 or so which is more typical for that time frame.

NBTA's Tiller said airport operations are already returning to normal and that business travelers that avoided commercial airlines are returning.

He noted, however, that travelers who used private jets to circumvent airport security may develop a liking for the convenience and make greater use of them in the future.

"In times when standard commercial aviation becomes more challenging, corporations look to potential alternatives," Tiller said. "Those alternatives provide added value during the challenging time, but they may provide added value even as things return to normal."

NBTA surveys show a growing use of private jets and charters since the 2001 terror attacks on the United States. A 2002 survey of corporate travel managers showed that 26 percent of U.S. companies used private jets. By 2004, 33 percent of the companies said they used them. Informal research from the NBTA show the trend continues.

Tiller added that business travel has increased across the board and airlines have not seen a decline in business travel customers.

Source: REUTERS

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