American, Continental and Delta reported quarterly operating losses and are bracing themselves for a downward spiral in corporate travel activity, though the net effect of the financial crisis on business travel remains to be seen.
In addition to budget cuts and weakened travel levels Continental continues to see ‘typical behavior among most of our corporate customers in response to weaker economic conditions.’
Those include advance purchase requirements, greater use of lower-cost restricted fares, policies that encourage travelers to trade down from business class to coach and more stringent travel approval processes.
JPMorgan airline analyst Jamie Baker in a research note said ‘the industry hadn’t undertaken unprecedented capacity cuts, and demand had yet to reflect the most recent global malaise. As such, we broadly consider 3Q industry results to be irrelevant, offering little to no insight as to the industry’s 2009 profit potential.’ Which means that he, like almost everyone else, has no idea of what might happen. Certainly no one has a clear idea how it was affect China.