Chaos in the Sky

Introduction

The terrorist attacks of September 11, 2001 brought about dramatic changes in the United States airline industry both in terms of short-term profitability and in standard operating procedures. While the United States economy was slowing in the months before this tragic event, the aftermath of the bombings led the economy into a depression. The airline and travel industry were the worst hit of all industries. Without a doubt airlines had never been through more troubling times before 9/11. The economic hardships inflicted upon them by 9/11 incident was forcing managers to cut costs to the bone. By mid 2003, the US airline industry had lost US$18bn since the 9/11 attacks, despite the US$15bn bailout. Even with passenger traffic returning to pre-9/11 levels many airlines are still bleeding. In what appears to be an industry-wide dichotomy traditional airlines struggle to stay in business while low-cost airlines are not only prospering but expanding. Low-cost airline share of the domestic market has almost quadrupled since 1990. This is a review of the situation before and after 9/11 on industry of these attacks and an overview of responses both by government and on industry to the event.

Key Issues

* Coping with unexpected disruptive events

* Future sustainability

* Cost effectiveness

Key Role Players

* Stake holders

* Global alliance

* Star

* OneWorld

* Skyteam

* Security

Supporting Issues

* Globalization

* Deregulation

* Technology

* World GDP

* Fuel Cost

* Geography

* Labor cost

* No. of retirees

* Open market

Supporting Role Player

* Low Cost Carriers

* Westjet

* Ryanair etc.

* Government

* Insurance Companies

Context Analysis

SWOT Analysis

Strength

1. Increased propensity to fly

2. The safety record and the associated public acceptance of air travel as both a fast and safe way to travel.

3. Airline staff is highly trained and...