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Travel Industry Still Struggles After September 11 - 2002-04-29

Since September 11, airline traffic has declined. Companies dependent on the travel industry for business have been forced to come up with creative ways to stay afloat.

Hundreds of thousands of businesses across the United States have been affected by the tourist slowdown. They range from restaurants to the firms that launder hotel linens, to the companies that package nuts and pretzels for airline fights.

At Instant Passport, a Rhode Island firm that processes travel documents, the sudden earnings plunge has forced owners to cut their own salaries and branch out with new services.

For LSG Sky Chefs, the world's largest airline caterer, revenues dropped 40 percent in September and are still running 15 percent behind normal levels. To make matters worse, spokesman Josefina Colsten says, as earnings went down, costs went up. "We had to deal with all these security issues that were coming up, such as plastic knives," she said. "We had to contact new suppliers, and label all the carts and make sure that the process would change immediately."

By laying off workers and figuring out new ways to cut costs, Josefina Colsten says LSG Sky Chefs stayed afloat and proved itself to be a reliable partner to the airlines. "The airlines are much more open now to involve us in menu design, in the processes, because they see there is a cost savings potential, which can lead to big cost advantages," she said. "We find the crisis has led the airlines to be much more open to changes."

Another company - Smarte Carte - rents luggage carts at more than 160 airports. Spokesman Christine Westfall says the company lost 40 percent of its income as travel decreased and it, too, had to cope with new security regulations. "People were not able to park within 300 feet of the initial ticketing area or curbside," she explained, "and in many airports we have units that are right there for people that are being dropped off at the airport, so those were non-performing units."

Smarte Carte responded by finding ways to cut costs and overhead. "It forced us to be as efficient as we possibly can, from an equipment standpoint as well as a labor standpoint in managing our business more effectively," said Ms. Westfall.

Business is still not back to normal, Christine Westfall says, but after all this time, Smarte Carte has forgotten what normal is. More importantly, she says, the company has discovered it can survive in a crisis.