This could be a shape of things to come. I expected it however as I would!   Anyway, here's Cheong with his stern and ruthless "Anne Robinson" comment!

Star Alliance/Business Class Travel -2: Margins May Drop
(MORE) Dow Jones Newswires 30-03-01
1206GMT

Margins May Drop

LONDON (Dow Jones)--Star Alliance members said Friday that a slowdown in the U.S. economy and signs of a global recession are starting to hit airlines' high-margin business class travel market.

Air Canada Chief Executive Robert Milton said business travel was down "significantly" which is starting to erode yields and could soon hit margins if the downturn continues.

Other senior executives of the 15-airline alliance echoed Milton's comment.

United Airlines said it has seen a decline in business travel in recent months, although it said it hasn't seen a decline in travel to Europe.

Many market watchers fear that the ongoing foot-and- mouth outbreak would hit airlines and hotels in the U.K. and on the continent. U.S. travelers account for 20% of hotel reservations in Europe.

Thai Airlines also said it noted a downturn but said that carriers in Singapore and Hong Kong - Asia's two key business centers - would likely be harder hit.

Singapore Airlines (Singapore: SIAL.SI - news) didn't comment on its business travel performance but Chief Executive Dr. Cheong Choong Kong suggested that significant changes would be made to its business-class products in the next few months. It is widely thought that British Airways' decision to introduce flat bed seats in its business class section has put competitive pressure on Singapore Airlines.

Cheong said "any competitor that steals a step on us will soon lose that competitive edge", he said. (Oooh! touchy! Must have been bored after that 1 hour Q+A session at LHR)

-By Brian Truscott and Ben Winkley, Dow Jones Newswires; 44-20-7842-9289; brian.truscott@dowjones.com -0- 30/03/01 12-33G

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