U.S., International Airlines See Paths Diverge

The falloff in China travel hasn't helped UAL(UAUA Quote), the largest carrier between the U.S. and China. "While the Olympics were a terrific event, it wasn't actually a terrific even in terms of business traffic this past quarter," said UAL Chief Financial Officer Kathryn Mikells. IATA said "economic distortions surrounding the Beijing Olympics "contributed to the sharp decline in Asia-Pacific traffic in August.

Surprisingly, the drop in international travel is not hurting Delta(DAL Quote), the U.S. carrier with the most rapid international expansion.

"We are not seeing a tremendous amount of softening or weakness with respect to international," Delta president Ed Bastian told an investor conference. "We are looking at solid double-digit [RASM] growth."

The reason, Bastian said, is that Delta's recent expansion has focused on unique destinations in Africa and the Middle East. Also, in November, the carrier plans to move its Mumbai flight from New York to Atlanta, where it can take advantage of the world's biggest hub.

As for Heathrow, Bastian conceded, "It's a bloodbath if you're an incumbent," but the yields still look good to a carrier that until recently was not permitted to serve the airport.