A LONG NIGHT'S JOURNEY

After posting losses of $11 billion in 2001, the airline industry expects to lose another $7.5 billion in 2002, a two-year total that experts call unprecedented. But it is a puzzle as to whether the end of 2002 will show some return to profitability. Air industry economists are projecting at least modest growth in the U.S. economy as a whole, but it's uncertain whether airline growth will follow. To get passengers to return, airlines have discounted tickets, causing a drop in yields of 18%, and it's uncertain whether fares will rise to previous levels. Airlines are retiring or parking aircraft and cutting back on new purchases. Discount operators, notably Southwest, are countering the trend and increasing their business. Many predict a full recovery of high growth rates won't take place until the end of 2003. Overseas airlines are doing better in general, with growth in some countries, depending on regional economic conditions. New costs for security and insurance are expected to eat into other areas of spending, especially moves to increase capacity.