Flying lows

In the direct aftermath of the terrorist attacks on America, it came as little surprise that the airline industry was most immediately affected by the economic fallout.

With US airspace temporarily closed, planes grounded around the world, and the imposition of security measures – including UK prime minister Tony Blair’s temporary ban on flying over central London – massive disruption was caused to air travel worldwide. When Wall Street reopened on Monday 17 September, shares in US airlines lost an average of 30 to 40 percent in early trading (1).

In the seven days following the attacks, most of the major US and European airlines announced massive redundancies and reduced their flight schedules by up to 20 percent. British Airways is axing 7000 staff, Continental is losing 12,000, Virgin 1200, and both American Airlines and United Airlines 20,000 (2). Such cutbacks have had a knock-on effect throughout the travel industry, with aeroplane manufacturer Boeing announcing up to 30,000 redundancies by the end of the year.

But within the airline industry it is widely believed that these measures had already been in the pipeline – and that the terrorist attacks merely brought them forward. Michael O’Leary, chief executive of low-cost airline RyanAir, told BBC Radio’s Today programme: ‘There were going to be large job losses on the way already. Companies were losing money before last week. Last week’s events have brought it forward.’ (3)

While dropping some of the services on the over-subscribed east-coast US routes might make business sense, the response from the airlines seems to have been effectively to give up. For the travelling public, the sight of airlines falling over themselves to tell us all how bad everything has become is unlikely to inspire confidence in air travel. When the head of the airlines’ governing body, the International Air Travel Association, describes 11 September as the worst day for air travel since the beginning of the Second World War (4), you can understand why people have been cancelling their holidays.

The airline industry seems to have been overwhelmed by the events of 11 September – using them as a cover for cutbacks that it was planning anyway (see The terrified economy?, by Daniel Ben-Ami).

One little-reported fact is that on the day that is said to have caused the airlines’ current misery, the US authorities took the rational decision to ground all commercial aircraft in US airspace – managing to land 3181 in the space of 75 minutes (5). This was an incredible technical achievement. It’s just a shame that the desire to ground so many aircraft safely hasn’t been met by the desire to get them all up again.

Peter Smith works for a leading independent travel company.

Read on:

spiked-issues: Attack on USA

(1) ‘Airline reservations slump’, BBC Online, 17 September 2001

(2) ‘100,000 airline jobs to go’, Sky News, 21 September 2001

(3) Today programme, BBC Radio 4, 21 September 2001

(4) Travel Trade Gazette, 17 September 2001

(5) See the USA Today website