Orange Alert May Put Airlines in Red

The color orange may leave U.S. airlines seeing more red, as in ink, just as signs emerged of demand recovering after the war in Iraq, analysts said. The U.S. government this week said it would raise its terror alert status to “high” from “elevated” because of renewed risk of attacks in the United States, which lifted the level to orange from yellow on the color-coded scale. That could be more bad news for a cyclical industry that counts on summer leisure travel and still suffers from the slow economy and the pneumonia-like SARS virus, analysts said. “Airlines have indicated that forward bookings were strengthening, but that was before the current Orange alert,” Blaylock & Partners airline analyst Ray Neidl said in a note, adding that airlines have little leverage to raise fares. Traffic for the most recent week ended Sunday, before the alert, declined on domestic and Latin American routes as well as on flights across the Atlantic and Pacific, Neidl said. Full Story