Former Continental Airlines CEO Bethune Talks Terror and Travel on CNBC

The former CEO of Continental Airlines appeared on CNBC this morning to discuss terror and travel and what it means for consumers.
By Amanda Schiavo ,

NEW YORK (TheStreet) --As the world comes to grips with yet another terrorist attack and a large loss of life, the market is reacting in the usual way, with airlines and travel stocks tumbling on concerns consumers will be less likely to take trips due to fears over safety.

On Thursday 84 people, including two Americans, were killed in Nice, France when a man driving a lorry plowed into a crowd of people celebrating Bastille Day.

The former CEO of Continental Airlines --now United Continental (UAL)-- Gordon Bethune, appeared on CNBC's "Squawk on the Street" on Friday to discuss the impact acts of terror have on the travel sector

CNBC anchor Simon Hobbs questioned Bethune as to whether or not airlines will cut capacity on safety concerns and what kinds of decisions travelers will be making.

"Well we've made those decisions after 9/11 when traffic fell across the system by 20% and New York by 30%, devastating quite frankly for revenue," Bethune said. "Nice, and France as a general spot, heavy August traffic, that's a big vacation month for Europe, it's going to have a negative effect on revenue and on travel in general."

Hobbs pointed out that the regrettable frequency of these incidents sees the market's negative reaction time lessen with each attack and Bethune noted that has been his experience.

Hobbs then questioned Bethune on the divide between American's and Europeans in terms of options for traveling. Europeans who are "in the midst of it" may feel you need to get on with life and keep traveling, whereas American's could decide to avoid these places all together.

"They have so many other choices to make. Europe has been traditionally a vacation spot, but the Caribbean and Latin America and certainly Asia offers alternatives. They say, let's just sit this one out and go somewhere else," Bethune said. 

In terms of the domestic airlines and the profitability and capacity questions mentioned earlier Bethune believes "we've got four really good air carriers that compete heavily in the marketplace. They're good quality air product. I've never seen our industry stronger than it is today in the United States."

Loading ...