The Effects of Terrorist Attacks to the Airline Industry
Terrorist attacks, such as those on Sept. 11, 2001, have political and economic ramifications that are often felt around the world. Because passenger airlines have been, and continue to be, the targets of attacks, the economic effects are especially devastating for the airline industry. The attacks in the United States and the bombing of Pan Am Flight 103 over Lockerbie, Scotland, are only two examples of attacks that targeted airlines.
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Significance
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Sept. 11, 2001, marked the most devastating attacks involving commercial airlines. After 9/11, the U.S. government grounded all U.S. air traffic for three days. In the weeks and months after the attacks, airline travel dropped significantly as public confidence in the safety of air travel plummeted.
Effects
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As passenger loads and airline revenues fell, carriers around the world laid off thousands of workers to head off bankruptcy. Overall, more than 100,000 airline workers lost their jobs.
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Airlines' Worries
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In testimony to Congress, Delta Airlines Chairman and CEO Leo Mullin estimated that the Sept. 11, 2001, attacks could cost the airline industry $18 billion to $33 billion in 2001.
Size
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Before 9/11, according to Mullin, Delta's passenger traffic averaged 300,000 fliers a day. After the attacks, passenger loads averaged 140,000 a day, less than half the pre-9/11 level.
Falling Stocks
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World stock markets fell sharply after 9/11. Airline stock prices were among the hardest hit.
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The iconic image of Pan Am made that airline a favored target for terrorists. A 1986 hijacking in Pakistan and the 1988 bombing over Lockerbie undermined the airline's efforts to convince the public that Pan Am was a safe airline. Although terrorism was not the direct cause, Pan Am went out of business in 1991.
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