Business Briefing | Company News: Early Date Set for U.S. Suit to Block Airlines’ Merger

The Egyptian authorities are spinning conspiracy theories to intimidate dissenters and rally the public.

Which makes more sense for most students?

Common Sense: For Airlines, It May Be One Merger Too Many

Until this week, when the Justice Department filed suit to block the proposed merger of the airlines’ parent companies, it had been notably lax on airline mergers. What the antitrust division deemed acceptable — even beneficial — for Delta Air Lines and Northwest Airlines (in 2008), and Continental and United Airlines (2010), and Southwest Airlines and AirTran Airways (2011) now “threatens substantial harm to consumers,” the complaint says.

US Airways has been doubly unlucky. United abandoned a merger deal with US Air in 2001 after the Bush administration said it would file an antitrust suit. And the head of the Justice Department’s antitrust division, William J. Baer, said this week that the department might have sued to block US Airways’ 2006 hostile bid for Delta if US Airways hadn’t abandoned the takeover. (US Airways did get approval to acquire America West in 2005.)

The government “abandoned the framework it used in approving the last three airline mergers,” said Paul T. Denis, a partner at Dechert L.L.P., which is representing US Airways. “In some ways, the complaint is a throwback to the 1970s,” before market-oriented economic analysis led to a broad revision in antitrust policy. “Now they’re saying those prior mergers were anticompetitive. That’s surprising. But even if they believe that, it’s not relevant to whether this merger will have an adverse effect.”

US Airways and American have come out fighting. The government “got this one wrong, very wrong,” Richard Parker, an antitrust litigator at O’Melveny & Myers and former director of the Federal Trade Commission’s antitrust arm, the Bureau of Competition, said at a news conference on Wednesday. He stressed that only a judge could block the merger and vowed to take the case to trial. But perhaps the airlines shouldn’t have been so surprised by the lawsuit — and shouldn’t be quite so eager for a courtroom showdown.

“It’s a different regime, different standards and a different time,” said Herbert Hovenkamp, professor of law at the University of Iowa and widely regarded as a dean of the antitrust bar. The relevant question may not be why the department moved to block the American-US Airways deal, but why it approved the United-Continental merger — a move it now seems to regret.

Mr. Baer of the Justice Department told me this week: “We consider every merger one at a time. Here, we had a proposed merger that would reduce the legacy carriers from four to three. That’s not the same as six to five, or five to four. That logic would get you from two to one pretty quickly.”

And while he said he couldn’t comment on the earlier airline mergers, since he has been the antitrust chief for just seven months, “if you look at the net effects, what we’ve seen is a reduction in capacity and higher prices, and not the benefits that were promised.”

Whatever the recent precedents, the proposed American-US Airways merger violates the Justice Department’s merger guidelines, which the Obama administration finally seems to be taking seriously. The merger would substantially reduce competition because “there are too many routes that would create a monopoly or oligopoly,” Professor Hovenkamp said.

According to the Justice Department, the American-US Airways merger would substantially reduce competition in over 1,000 city pairs served by the two airlines. Among the more egregious examples it cited are Charlotte, N.C.-Dallas; Charlotte-Durango, Colo.; Dallas-Philadelphia; and Kahului, Hawaii-Tampa, Fla. It said the merger would create four out-and-out monopolies, albeit on secondary routes, including three that serve St. Croix in the Virgin Islands. And it said the merger would reduce competition on more than 1,000 routes.

It’s pretty clear what happens when concentration increases substantially on a route between two cities. After Continental and United merged, the combined airline accounted for 79 percent of the service between O’Hare International Airport in Chicago and George Bush Intercontinental Airport in Houston. During a three-month period after the merger, fares on that route were 57 percent higher than they were three years earlier, according to the aviation industry Web site PlaneStats.com. United’s fares overall increased 16 percent in the same period.

US Airways Shareholders Approve Merger With American Airlines

The Justice Department and attorneys general from 18 states are still reviewing the deal, as are European Union officials, to see if it would create monopoly service on some routes.

The merger, an all-stock deal that has been valued at $11 billion, is the latest in an industry that has undergone substantial consolidation, leading to the mergers of United and Continental in 2010, Delta Air Lines and Northwest in 2008, and Southwest Airlines with AirTran in 2011.

US Airways said in a statement that more than 99 percent of the shares that were voted on Friday supported the merger. US Airways shareholders will have a 28 percent stake in the combined airline.

American has been in bankruptcy since November 2011, and final approval of the bankruptcy court is also required for the merger. The new airline would keep the American name and remain based in Fort Worth. American’s creditors would own 72 percent of the combined airline.

W. Douglas Parker, the chairman and chief executive of US Airways, said at the annual shareholders’ meeting on Friday that the combined airline would offer more than 6,700 daily flights to 336 destinations in 56 countries. He said it would offer customers more choices as well as provide cost savings for the airlines.

But the Government Accountability Office, a research arm of Congress, said in June that the merger would reduce competition in a far larger number of airports than earlier airline mergers, including the one that created United Continental.

The report found that 1,665 routes between cities would lose one competitor as a result of the merger, affecting more than 53 million passengers. A new competitor would be created in 210 routes, affecting 17.5 million passengers. The report added, however, that the great majority of those markets still had “effective competitors.”

Elite Status on Airlines Loses Some of Its Appeal

Travelers with elite status in an airline’s frequent-flier program used to be rewarded with perks unavailable to the masses, like access to better seats, priority boarding and faster security lines.

But as carriers have begun selling these services to anyone willing to pay a fee, or offering them to customers who carry an airline-branded credit card, the status is losing some of its appeal — at least for frequent fliers on the lower end of the elite spectrum.

“I’ve definitely noticed an erosion in benefits since I became elite,” said Bill Wilkes, a Delta SkyMiles Gold member, the second-lowest rank in Delta’s four tiers of elites. “Pretty much anyone who gets approved for a SkyMiles credit card can get priority boarding and a free checked bag.”

Mr. Wilkes, who works for a Major League Baseball team, noticed on a recent Delta flight from Baltimore to Sarasota, Fla., that more than half the passengers lined up when priority boarding was announced.

He estimates that he gets a complimentary upgrade — arguably the most important benefit of elite status — on only 15 to 20 percent of his domestic flights, compared with 40 to 50 percent several years ago.

That shift can be attributed partly to the growing ranks of elites on any one airline, because of mergers like Delta’s with Northwest, as well as more ways to earn elite status through credit card spending, not just flying.

Program rules vary by airline, but travelers typically have to accumulate 25,000 miles in a year to become a bottom-tier elite, 50,000 miles for the middle tier and 75,000 to 125,000 miles for the top tiers. Most people have to requalify each year, and miles earned from credit card spending increasingly count toward the minimum required.

For instance, customers approved for Delta’s Reserve card from American Express can earn 10,000 elite qualifying miles after their first purchase. (There is a $450 annual fee.)

US Airways even sells access to its “preferred” status: a traveler who is short 1,500 miles to qualify for a particular elite tier can pay a $249 fee to close that gap. Prices vary depending on the mileage needed, but can run as high as $3,999 for 100,000 preferred miles.

While airlines do not disclose how many people are in each elite tier, Henry Harteveldt, a travel analyst at the consulting firm Hudson Crossing, said about 3 to 4 percent of a carrier’s frequent-flier members had elite status. Delta and United each have 90 million frequent fliers, and American has 69 million, which means anywhere from two million to four million elites a program (though the number may be higher).

“When you think about the scale of these programs, it’s an enormous volume and, of course, these people travel more often,” Mr. Harteveldt said. “When you’re on a hub-to-hub flight like United from Chicago to San Francisco, elites can sometimes make up between a third and half of the plane.”

There are some signs that carriers recognize this issue. Delta recently announced that starting next year, passengers can qualify for elite status based on miles earned (or segments flown) and by spending at least $2,500 on Delta tickets, not including taxes or optional fees. The spending requirement is waived for those who charge $25,000 a year using a Delta credit card.

“I expect other airlines are going to take steps to thin out their elite ranks by instituting similar spending requirements,” Mr. Harteveldt said. “The people who fly the most and spend the most will receive the benefits they value more often.”

But airlines also value the revenue they earn from selling some benefits to nonelite travelers, a growing practice as the industry seeks to maintain its profits.

For $10 a flight, JetBlue passengers can buy access to priority security lines typically reserved for elite and premium cabin passengers. American sells priority boarding for $18 round trip, as well as a “Choice Essential” package for $68 that includes priority boarding, a checked bag and a change fee waiver on a domestic round-trip ticket. Even Southwest, known for its “bags fly free” motto, recently began selling an early boarding option for $40 a flight.

Alaska Airlines, Flying Above an Industry’s Troubles

Damon Winter/The New York TimesFor decades, flights over spectacular Alaskan landscapes could end with devilishly difficult landings. More Photos »

FLYING over Alaska in the wintertime is a spectacular experience. At 35,000 feet, the state’s rugged beauty unfolds, a succession of white mountain peaks against steel-blue skies, icy lakes and frozen rivers that snake as far as the eye can see. It’s an awesome sight, wild and pristine, that glows in a thousand hues of red, orange and pink when the sun sets against the horizon.

The pilots Dan Kaplin and Tom Peebles complete a safety check before a short flight from Wrangell, about 200 miles southeast of Juneau, to Petersburg. More Photos »

But then, you have to land.

Juneau’s airport is surrounded by mountains, the approach often buffeted by treacherous wind shear. Sitka’s one small runway is on a narrow strip of land surrounded by water. And in Kodiak, the landing strip ends abruptly at a mountainside. The airport approach is so tricky that first officers are not allowed to land there; only captains are trusted to do so.

Doug Wahto knows these airports well. He grew up in Juneau, worked as a commercial fisherman and builder and started flying with Alaska Airlines in 1970. As a pilot, he honed the art of reading wind conditions by looking at how snow blew over mountain ridges.

Mr. Wahto retired six years ago, but not before seeing the transformation of flying in Alaska and of the airline where he spent his career. Alaska Airlines is puny compared to the major carriers: it has 124 planes, while United Airlines has more than 700 and four times as many passengers. But because of the state’s topography and extreme weather, it was the first to develop satellite guidance, a navigation technique that has transformed landing at Alaska’s tricky airports. The technique is now at the heart of the Federal Aviation Administration’s plan to modernize the nation’s air traffic system, a project that is expected to cost tens of billions of dollars over the coming decades.

“It doesn’t take a rocket scientist,” Mr. Wahto says, “or a crusty old dog like me to fly these approaches anymore.”

Largely because of that technology, flying in Alaska is now remarkably reliable — even in the dead of winter, when it is snowing, when there are just two hours of daylight, when runways are made slippery by ice or sleet, when winds blow at more than 50 miles an hour and pilots can barely see out the windshield. When, in other words, no one in his right mind would want to land a Boeing 737 with 140 passengers on a 6,000-foot runway.

Alaska Airlines, in fact, had the industry’s best on-time performance for the third consecutive year in 2012, with 87 percent of flights landing on time, according to FlightStats, a data provider.

That reliability means a lot in a state where air travel is often the only option, and where Alaska is the only commercial jet carrier with in-state routes. The airline flies to 16 towns accessible only by plane or boat, and, in doing so, ferries food and medical supplies, takes thousands of oil workers above the Arctic Circle and operates as the biggest air shipper for the state’s fisheries.

This role as primary transport for in the state is still a healthy business, but Alaska Airlines has prospered by expanding its services. From its Seattle base, it now has a bigger presence than other airlines along much of the West Coast. In 2007, it moved into Hawaii; its flights to the state now account for 20 percent of its available seat miles, an industry standard for measuring capacity. That is more than the 17 percent in Alaska itself.

Megamergers, most recently of US Airways and American Airlines, have redrawn the boundaries of domestic carriers, concentrating the business as never before. Alaska Airlines, for its part, has cultivated staunch independence. Unlike carriers that have faced bankruptcy or acquisition, Alaska has turned a profit for 33 of the last 39 years. In 2012, it had a record $316 million in net income, up 29 percent from 2011.

Although it started in a sparsely populated, meteorologically unwelcoming, financially challenging corner of the country, Alaska has built a successful franchise that is the envy of many rivals.

Concern and Canceled Flights as Airlines Wait for 787

Boeing is trying to convince federal regulators that it has found ways to prevent the hazards with the lithium-ion batteries that led to the grounding of the new planes in January. On Friday, the company met for several hours in Seattle with technical representatives of the airlines to go over those plans.

Since mid-January, the eight carriers that received 50 787s have canceled thousands of flights and scrambled to rearrange their schedules.

Because airlines have few planes to spare, the grounding of the 787s has had a ripple effect throughout their networks. United Airlines, for instance, has delayed new services between San Francisco and Paris and between San Francisco and Taipei, Taiwan, for several weeks because planes originally needed on those routes were being used as replacements for the 787s.

Boeing hopes the 787s, made with lightweight carbon composites to save fuel, can fly passengers again in April. But some aviation analysts said it could be three to six months before that happened.

Michael P. Huerta, the head of the Federal Aviation Administration, told Congress this week that agency experts were evaluating Boeing’s plans to redesign and test the battery. He said his staff would provide him with its assessment of Boeing’s proposals next week.

“Once we approve a plan, then we have to go through the process of actually implementing the plan, which would involve a great deal of testing, a great deal of further analysis and re-engineering before those planes will be flying again,” Mr. Huerta said.

Officials from the federal agency said Boeing needed to conduct more laboratory tests on the proposed changes before they would consider test flights.

Safety investigators are still not certain what went wrong in two separate incidents in which one battery caught fire and another emitted smoke.

Besides dealing with the hazards, Boeing will probably end up paying the airlines tens of millions in compensation for the disruptions, analysts said.

The plane’s biggest customer to date, Japan’s All Nippon Airways, has canceled over 3,600 domestic and international flights through May.

United, the only domestic carrier with the planes so far, has taken the 787s out of its schedule until June 5, said Christen David, an airline spokeswoman. United has made one exception to its 787 cancellations. A new service between Denver and Tokyo-Narita, which was supposed to begin on March 31, is now scheduled to begin on May 12.

United declined to say how much revenue it had lost because of the 787’s grounding and what type of compensation it would seek from Boeing.

Poland’s national airline, LOT, has taken its two 787s out of its schedule through the end of September and will also seek compensation from Boeing. One of its planes is still parked at Chicago’s O’Hare Airport.

Air India has said Boeing might provide compensation for the difference in the costs of operating a larger 777 instead of the more fuel-efficient 787.

The other 787 operators are Japan Airlines, Ethiopian Airlines, LAN Airlines of Chile and Qatar Airways. Boeing has orders for about 800 additional jets.

Raymond L. Conner, the chief executive of Boeing’s commercial airplane division, visited Japanese airline executives as well as regulators on a trip to Tokyo this week.

All Nippon has 17 787s, which make up about 7 percent of its fleet. The carrier has said that its 150 787-trained pilots have been forced to remain at home while pilots for other types of planes take on the additional workload. But the airline said this week that it had no plans to cut back on its orders for 49 more 787s.

To Court Well-Heeled Customers, Airlines Offer More Amenities

Those flat-bed seats for international business-class fliers? Now that most airlines offer them, they are not so special anymore.

Instead, in the newest iteration of the battle for deep-pocketed fliers, the airlines are introducing an ever-growing assortment of in-flight amenities to go with those seats.

Delta Air Lines, in the latest move, plans to announce on Tuesday that a partnership with Westin Hotels and Resorts will give business-class passengers on international and transcontinental flights “Westin Heavenly In-Flight Bedding,” starting this summer.

That follows the introduction in the last two years of upgrades in business-class services by airlines like American Airlines, United Airlines, Virgin Atlantic, Lufthansa, Cathay Pacific and Qantas, featuring everything from improved mood lighting and in-flight entertainment to designer amenity kits and the option to pre-order meals by e-mail.

Carriers are willing to invest in the services, said Henry Harteveldt, an analyst for Hudson Crossing, a travel industry consultancy, because “profits from long-haul, international premium cabins can be five times greater, or more, than what is earned in economy, and several times greater than what is earned on domestic or regional flights.”

“Since the end of the last financial recession in 2010, we’ve seen the beginning of reinvestment by airlines in their products,” he added. “It reflects the normal cycle.”

Peter J. Bates, president of Strategic Vision, a marketing communications company in Tarrytown, N.Y., said that “as airlines consolidate into smaller groups, they are continuously trying to find ways to gain market share and differentiate their product.” He added: “This goes in phases. Now that the airlines have gone through the flat-bed phase, they have to create more bells and whistles to differentiate themselves.”

Carriers no doubt also want to respond to what Egencia, the travel management arm of Expedia, identified in research last summer as companies’ “increasing willingness to bump their travelers” to business or first class on “flights lasting more than nine hours.” Egencia said 45 percent of business travelers were permitted by their employers to travel in such seats “on flights over nine hours, compared to just 6 percent of business travelers on flights lasting less than nine hours.”

Delta’s Westin bedding is part of a new, broader strategy to cater to passengers’ need for a good night’s sleep, company executives said. They pointed to customer research, which has shown that this is the No. 1 priority for all passengers, regardless of their class of service.

Tim Mapes, Delta’s senior vice president for marketing, said, “The airline that comes to represent a good night’s sleep in the minds of customers will be the airline that attracts a disproportionately large share of customers.”

To that end, Delta worked with Westin to create a new comforter as well as sleeping and lumbar pillows and pillow cases. The hotel chain introduced its “Heavenly Bed” program, featuring a pillowtop mattress and special sheets, pillows, down blankets and duvet, in 1999, and briefly collaborated five years ago with United Airlines to offer special bedding on transcontinental flights and Westin seating, lighting and scent in some airport lounges. Delta will begin offering the new bedding this summer in business-class cabins on all international flights, and on flights from Kennedy Airport to Los Angeles, San Francisco and Seattle, and from Atlanta to Honolulu.

In addition, Delta is training its pursers, who supervise cabin crews, to change in-flight procedures to provide a more restful environment by, for example, streamlining public announcements, closing overhead compartments gently and controlling lighting. Delta’s in-flight entertainment system has a new “white noise” channel, and the carrier is creating an express meal menu, with lighter fare and one-step delivery, for transcontinental business-class passengers. The menu is already available on many international flights.

On the Road: With Demand Dropping, Airlines Focus on Fees

The initiative is arguably counterintuitive because domestic airlines have been piling up money in recent years from all sorts of fees — baggage fees and the change-penalty fees among them — on top of the base fares.

American’s new coach fare options are “another example of how we’re building toward a new, innovative and more modern airline,” said Rob Friedman, the vice president for marketing at the airline, which is about to emerge from bankruptcy court protection and is in talks with US Airways.

Oddly, while American moves to incorporate some stand-alone fees into some base fares, a process known as bundling a fare, Southwest Airlines seems to be going in the other direction. Southwest, which has long bragged about having simple fare structures that don’t include fees for things like changing tickets or checking bags, recently announced plans to increase its dependence on fees, a process known as unbundling.

It all adds up to more complexities on the chalkboard of airline fee and fare formulas.

The changes by American and Southwest suggest that domestic airlines in general are looking more closely at ways to experiment with revenue, especially from business travelers, as a new year begins with indications that demand is dropping.

In November, most airlines in the United States reported small declines in passenger demand and in load factors, the number of available seats filled by paying customers. Southwest, for example, reported that its revenue passenger-miles, a standard measure of demand, were off 3.3 percent compared with November 2011.

On Monday, the airline forecaster Michael Boyd, of the Boyd Group International, summed up his predictions for 2013 this way: “No traffic growth. Fewer flights. Less capacity.” Airlines, he added, will focus more “on revenue growth, not traffic volume.”

American’s new fare strategy encompasses two basic changes, both of which include some fees in coach fares. One is Choice Essential, which costs $68 extra for a round-trip domestic fare but eliminates the $150 penalty fee for ticket changes after purchase. It also drops the $25 fee for the first checked bag and gives the buyer “priority boarding.” (We’ll address the laughable scrum that airlines’ “priority boarding” has become in a future column.)

Another option, Choice Plus, costs $88 extra and adds penalty-free same-day standby change options, while also eliminating the change penalty. And it includes what American calls a free “premium beverage” (beer, wine, cocktail), and a 50 percent bonus on frequent-flier mileage awards, as well as priority boarding.

American’s lowest nonrefundable coach fare structure, which it now calls Choice, remains unchanged. That is, checked-bag fees and $150 penalty fees for making a reservations change remain in effect, while customers continue to have “the flexibility to purchase additional products à la carte,” as American put it.

The American penalty fee changes are aimed mostly at business travelers, the customers most likely to occasionally change plans after a ticket is purchased. Southwest’s recently announced fare and policy changes include a penalty fee on tickets that are not used and not canceled before flight time.

Southwest has long been valued by many business travelers for not charging a penalty fee to rebook a ticket, and that has not changed. Southwest said it was merely adding a “no-show fee” for customers using the cheapest fares who rebook “tickets that are not flown and not canceled by our passengers prior to a flight,” Robert E. Jordan, Southwest’s chief commercial officer, said at a recent meeting with airline stock market analysts.

But in describing initiatives that are certain to interest Southwest’s intensely loyal customer base once the details are announced early in 2013, Mr. Jordan also said, “We are increasing our ancillary fees” in general, without providing specifics. He said that Southwest hoped to raise an additional $100 million this year from new fees.

There is no indication that Southwest is considering revising its policies on basic rebooking or allowing the first two bags to be checked free. Still, an increasing reliance on fees will probably start to redefine the Southwest flying culture. For example, Mr. Jordan said, “we are testing a new revenue stream enabled by selling open and premium boarding positions, so that’s the A1 to A15 position, and selling those open positions at the gate.” Southwest also plans to increase its “EarlyBird” priority boarding fee to $12.50 from $10.

Airlines have come to depend mightily on revenue from fees. In 2011, domestic airlines raised $2.4 billion in change-penalty fees, up from $915.2 million in 2007, according to the Bureau of Transportation Statistics, an agency of the Transportation Department.

And there is even more money in fees for checked bags. In 2007, a year before most airlines other than Southwest began charging for most checked bags on coach fares, domestic carriers raised a mere $464.3 million from such charges. Last year, the total was $3.4 billion.

Judge Clears United Airlines in a 9/11 Collapse

A federal judge in Manhattan ruled Wednesday that United Airlines was not responsible for the collapse of a third World Trade Center building on Sept. 11, 2001.

The plaintiff in the case, Larry Silverstein, the leaseholder of the World Trade Center property, claimed that the collapse of 7 World Trade Center stemmed from airport security lapses that allowed hijackers to crash an American Airlines plane into the complex.

Judge Alvin K. Hellerstein granted a request by United and its parent, United Continental Holdings, to dismiss Mr. Silverstein’s claims. Tower 7 collapsed several hours after being pierced by debris from the crash of American Airlines Flight 11 into the nearby 1 World Trade Center. Two of the Flight 11 hijackers, Mohammed Atta and Abdulaziz Alomari, began their trip to New York at the Portland International Jetport, in Maine. They boarded a flight to Logan International Airport in Boston, from which they connected to the American Airlines plane.

Mr. Silverstein’s lawyers argued that because United was among the airlines that ran Portland’s only security checkpoint, it was legally responsible for the screening of all passengers and had missed a “clear chance” to prevent the hijacking.

But Judge Hellerstein of Federal District Court in Manhattan concluded that United could not have foreseen the events that led to the destruction of Tower 7.

“It was not within United’s range of apprehension that terrorists would slip through the security screening checkpoint, fly to Logan, proceed through another air carrier’s security screening and board that air carrier’s flight, hijack the flight and crash it into 1 World Trade Center, let alone that 1 World Trade Center would therefore collapse and cause Tower 7 to collapse,” Judge Hellerstein wrote.

In 2009, he dismissed claims against other airlines for damages caused by United Flight 175, which also hit the Twin Towers.

Bud Perrone, a spokesman for Silverstein Properties, said it was disappointed in Wednesday’s ruling, but would continue to pursue a negligence case over Flight 175.

On the Road: Lean Airlines in Poor Shape to Handle Passenger Backlog

Besides the immediate effects of the storm, the airlines have cut so much that they have little ability to handle any extra strain. Fleets have been pared; employees laid off. In a system now flying with more than 80 percent of seats full, there’s no slack to handle a crush of desperate passengers looking to reschedule flights knocked off the board by a big storm.

“Right now we’re looking at tens of thousands of business travelers whose trips were interrupted, and who are stuck,” said Joseph Bates, the vice president for research at the Global Business Travel Association. The Eastern seaboard is “the busiest area of the United States in terms of business travel, and it’s essentially going to be shut down for two days.”

Expect large numbers of additional flight cancellations this week. The 7,300-plus cancellations counted Monday afternoon by the flight tracking service Flightstats.com represented about a quarter of the 27,000 scheduled commercial flights on a typical weekday in the United States. As thousands of scrubbed flights pile up through the week, the likelihood for air travel chaos is high.

Basically, the best advice is this: Stay home this week. If you’re already en route and stranded, or if you have a ticket for air travel in the near future, consult airlines for the current storm-travel waiver policies. But good luck with that, because airlines long ago thinned staff at their call centers, and the Web sites were providing scant information on Monday, at least.

Generally, the airlines are waiving penalty fees, which are usually $150, for passengers who rebook after canceling a so-called nonrefundable reservation, or having one canceled. But the restrictions are tight.

“I’m hearing from business travelers who said they’re being rebooked, only to find that the rebooked flight is also canceled,” said Joe Brancatelli, the publisher of the subscription business travel site Joesentme.com.

“These are ridiculous travel waiver policies that are trying to force you into rebooking through a very narrow window,” he said.

Some airlines seemed to project a rather casual attitude about the crisis on their Web sites, it seemed to me. Even as scheduled flights were being canceled wholesale, the United Airlines advisory, for example, provided a list of what it referred to as “cities that may experience flight delays due to weather conditions.”

United’s policy on rebooking was typical. The change penalty and any extra charge for higher fares is waived, provided a passenger rebooks and begins the new trip by Nov. 7. On Delta, new travel has to be commenced by Sunday.

For the airlines themselves, one chief concern is keeping airplanes and crews out of the storm and in place to be rescheduled. “They saw this coming and knew it was going to be nasty, and they didn’t want the hardware on the ground,” said G. Bruce Hedlund, a recently retired American Airlines captain.

Once the storm abates, airlines will need to reposition planes and crews. “When the skies turn blue again, that doesn’t mean everything’s immediately fine. It takes another couple of days to get the crews and the jets to where they belong and bring the system back,” Mr. Hedlund said.

There’s also more dependence on part-time employees who can be scheduled ad hoc, meaning it’s going to be harder to get the system back quickly. “Now the computer says, ‘I don’t need you for eight hours; I need you at the peak,’ so it’s a part-time job tailoring the schedule for demand, and that adds complications,” he said.

In Orlando, Fla., the annual convention of the National Business Aviation Association, which represents the private jet industry, was getting under way on Monday, with questions on how many of the 25,000 people expected would actually get there.

“We haven’t heard from hotels that people are dropping reservations,” said Dan Hubbard, a spokesman for the group.

As the storm loomed, the Global Business Travel Association offered statistics extrapolated from past disruptions and found that in a major hurricane of one to two days’ duration on the East Coast, the total loss in business travel spending would be about $684 million, and 580,000 business trips would be disrupted.

Mr. Hedlund, the retired American Airlines captain, said that the math was simple as the storm raged and waned. “There are not any extra airplanes. There aren’t any extra crews. So you just wait till the rumbles die down, and the system recovers almost of its own natural accord.”

I.A.T.A. Raises Profit Outlook for World’s Airlines

IATA, which represents about 80 percent of global carriers, now expects the $630 billion airline industry to make a net profit of $4.1 billion this year, up from an earlier forecast of $3 billion but still less than half the $8.4 billion achieved in 2011.

IATA also said in its first forecast for 2013 that industry profits will rise further next year to $7.5 billion, helped by passenger traffic expansion of 4.5 percent and cargo expansion of 2.4 percent as global economic growth quickens to 2.5 percent from an expected 2.1 percent this year.

Profit margins will remain razor-thin at 1.1 percent in 2013 versus an expected 0.6 percent in 2012, the association added.

"The outlook improvement is due to airlines performing better in a difficult environment," Tony Tyler, IATA's director general and CEO said in a statement.

"The European sovereign debt crisis lingers on. China continues to moderate its growth and the impact of recent quantitative easing in Japan and the U.S. will take time to yield growth," he added.

The Geneva-based body said aircraft flew on average 79.3 percent full in the first eight months of this year with passenger demand increasing by 1.4 percentage points ahead of capacity.

"The fact that there are fewer spare seats on flights than would be expected at this point of the business cycle, when lower demand and rising aircraft deliveries tend to lower the proportion of seats sold, suggests airlines have resisted the temptation to win back revenue by increasing capacity," the association said.

ASIA, MIDDLE EAST

IATA's improved outlook is a boost for Asian airlines that have been plagued by weak earnings. In August, the world's largest air freight carrier, Cathay Pacific Airways, posted its worst first-half loss since 2003, hurt by high fuel costs, weak cargo demand and fewer premium passengers.

"Despite a slowdown in the Chinese economy, Chinese domestic demand is still growing at nearly 10 percent," Tyler said. "The demand for regional and long-haul travel has held up better than expected in the face of economic uncertainty."

Australia's Qantas Airways also posted a full-year net loss of A$244 million ($253.74 million) for the first time in 17 years and cancelled orders for 35 Boeing Dreamliner jets to cut costs.

Although Singapore Airlines Ltd, the world's No.2 carrier by market value, posted a net profit of S$78 million ($63.59 million) for the quarter ended June, it warned that profits at its cargo and passenger units remain under pressure.

North American carriers are expected to boost profits to $1.9 billion this year from $1.3 billion in 2011, after extensive restructuring. Asian profits of $2.3 billion continue to drive most of the industry's growth although they will be down from last year's $5.3 billion.

Europe, mired in an ongoing debt crisis, is expected to suffer wider-than-previously-expected losses of $1.2 billion.

Middle Eastern carriers gained market share during the first eight months of the year, with passenger traffic rising 17.1 percent and cargo demand increasing 14 percent from a year ago.

"The region's carriers continue to expand their long-haul market share with connections through their expanding hubs, IATA said.

Emirates Airline and other Middle Eastern carriers had a 11.5 percent share of international passenger traffic in August this year, up from 4.8 percent in 2002, according to IATA data.

The share could rise further as Emirates last month signed a deal where Australia's Qantas Airways agreed to use Dubai instead of Singapore as its hub for European flights from March 2013. Under the deal, Qantas will also end a 17-year old alliance with British Airways.

Globally, IATA raised its forecast for passenger demand despite weak confidence in Europe, but pushed its forecast for cargo into the red. The economically sensitive sector is expected to see a 0.4 percent contraction in 2012 instead of 0.3 percent growth as previously forecast.

About 40 percent by value of internationally shipped goods go by air and cargo demand is seen as a barometer for world trade and the health of the economy.

IATA represents some 240 airlines that in turn account for 84 percent of global air traffic.

(Additional reporting by Tim Hepher in PARIS; Editing by Matt Driskill)