Airlines

U.S. Airline Industrial Trends

The U.S. airline industry has always been particularly vulnerable to economic and political changes. The deregulation of the U.S. airline industry in 1978, led to an intense price competition and other elements have harmed the U.S. airlines in recent years , the terrorist attack of September 11, 2001 nearly destroyed the U.S. airlines industry. The attack did severely damage the airlines ability to achieve profitability. The U.S. airlines industry is just recovering from the devastation of 9/11/01, and currently the industry is experience the financial pain of rising fuel costs, mixed with intense competition, a relatively weak U.S. dollar, and with so many airline carriers filing for Ch. 11 Bankruptcy, the U.S. airlines market is expected to experience some softening of demand and greater customer resistance to fare increases.

The Impact of 9/11/01

The terrorist attacks of 9/11 practically crippled the United States airlines industry and the potential threat of another terrorist attacks negatively impacts the airlines industries. From 2001 through 2005, the U.S. airlines industry lost “more than $35 billion” reports the Air Transport Association.[i] “The impact on air travel volume was dramatic, with the volume of air travel down 31.6 % in September 2001 compared to September 2000.”[ii] The grounding the entire U.S. airlines industries fleet for three days in the wake of the attacks, cost airlines millions in lost revenue. The economical impact September 11, 2001 had on air travel practically forced; the U.S. congress to offer, “rescue packages to make up the loses of healthy airlines that were thrown into crisis because of the attacks.”[iii] Losses would have been significantly higher had Congress not quickly passed the “Air Transportation Safety and Stabilization Act in September 2001, which provided $5 billion in emergency assistance to the airlines.”[iv] September 11, 2001; practically devastated the U.S. airlines...