Olympics no road to gold for airlines

Difficulties and high costs associated with flying to China have kept many sports fans at home for these Olympic Games, which opened Friday in Beijing. Tour packages have started at ,200 per person.

? Olympics fans, it’s not too late to jump on a jet to Beijing, provided you have a visa.

A check of reservations systems shows a glut of open seats on flights to China next week.

That may be great news for procrastinators and sports junkies, but it’s an ominous sign for United Airlines and other carriers that might have expected the Summer Games to generate heavy air traffic across the Pacific.

Instead, the Olympics appear to be costing the airlines business.

Corporate customers, the airline industry’s chief source of profit, are largely avoiding the Pacific region, sources said. They are scared off by new red-tape snarls that have made getting visas to China a chore, fearful that Olympics fans have snapped up most hotel rooms and expectant that Chinese commerce will largely grind to a halt during the Games.

Thomas Lee, a Los Angeles-based executive, said via e-mail that while his aerospace firm hasn’t cut back much on travel to China, “Admittedly, during the Olympics, we are avoiding Beijing due to assumed overcrowding.”

Travel agents report that leisure travelers’ interest in these Olympics has been tepid at best, with many would-be vacationers balking at tour packages that start at $7,200 per person, discouraged by news reports of Beijing’s smog and crowds, or deterred by the dearth of tickets to popular events such as the opening ceremonies.

“We only had two or three people who went, although I had a number of people who inquired,” said Peter Carideo, president of Lincoln Park, Ill.-based CRC Travel.

“With opening ceremony tickets going for as much as $7,000, it’s expensive, and people are just not going,” added Joe Mazza, president of FCM Bannockburn Travel Solutions.

The Olympics doldrums are a bigger issue for Chicago-based United than other U.S. carriers, analysts said. Not only is United official airline sponsor of the U.S. Olympic team, it offers more flights to China than any other U.S. carrier, including non-stops from Chicago and Washington-Dulles International Airport that arrive at Beijing’s stunning new Norman Foster-designed international terminal. It’s one of the architectural gems intended to showcase China’s capital city during the Games.

In July, when Olympics travelers began trekking to China, United’s revenue passenger miles, a measure of paying passengers, dropped 11.9 percent across the Pacific region. United’s load factor, a measure of how full planes are, fell 5.4 percent. Both were the largest declines in traffic reported among any of the international regions flown by United, the nation’s second-largest carrier.

United blamed the steep decline on Olympic-related market turbulence and a flood of new capacity to China, which accounts for about 40 percent of its revenue in the region.

“Fewer business travelers, which represents largely those who travel on United, are going to China during the Olympics,” said United spokeswoman Robin Urbanski.

Northwest Airlines, No. 2 in passenger traffic to Asia among U.S. carriers, saw its revenue passenger miles there decline by 1.5 percent during July and its load factor drop 2.3 percent. American, Continental and Delta also reported weaker Pacific results.

Laura Liu, Northwest senior vice president, international, said via e-mail that high fuel costs and weakening global economies are starting to take their toll on travel between the U.S. and Asia.

But airlines also are grappling with “directional issues” caused by the Summer Games, Liu said. Most flights to Beijing were sold out in advance of the opening ceremonies, while few customers traveled in the opposite direction. And the reverse will occur for a couple of days after the closing ceremonies on Aug. 24.

Another issue is that “travelers to Asia visit many countries on one trip, given the long distance,” Liu added. “Because little business is occurring in China the next few weeks, it has a spillover effect to other Asia destinations, as passengers delay trips until it’s back to business as usual in China.”