The Airline Industry s Impact On The United States

After six consecutive years of profitability, the U.S airline industry was descended into a downward spiral. The number of passengers flying dropped from 56 million in August 2001 to 30 million in September with no passengers for two days after the attacks (Poling). It took three years for the airlines to reach the 56 million passenger mark again. The impact on the travel industry, specifically the airlines, was more severe than in other areas. Immediately following the September 11th attacks, the airline industry was severely damaged with a four day shutdown of the national aviation system. Across much of the United States and Canada, flights were grounded. Airlines and airports that did not have dedicated ground crews and additional†¦show more content†¦Many businesses temporarily suspended non-essential travel for their employees, significantly reducing business travel (Logan). Congress responded by creating the Air Transportation Stabilization Board, a body authorized to give the airlines up to $10 billion dollars in loans (Logan). However, despite this funding, several important airlines including American and US Airways, declared bankruptcy while other smaller airlines ceased operations. The lack of passenger demand canceled flights and increased security expenditures resulted in massive financial losses. In addition to layoffs, airlines were forced to renegotiate labor contracts (Logan). Lingering effects of the 9/11 attacks continued over the next few years. Airlines struggled to match the decline in passenger traffic by cutting capacity and changing route destinations (Tyler). This spanned the development of low cost carriers and air fares decreased over the next few years. The rising dominance of low cost carriers in the domestic market place caused the major U.S. carriers to shift capacity from domestic to international markets. Passenger traffic finally reached its pre 9/11 levels in 2004, although, profitability did not return until 2006 ( Tyler). The airline industry also had to adjust to changes in consumer attitude. The Transportation Security