Long-term Consequences of 9/11 on Airline Industry: Analytical Essay

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Long-term Consequences of 9/11 on Airline Industry: Analytical Essay

September 11, 2001, terrorist attacks rocked the U.S. in a profound way, dramatically disrupting the understanding of national security within U.S. borders. Every business or economy sector, more than the airline industry, felt the impacts of these events. The sector has been negatively affected by both the immediate reaction to the attacks and the long-term consequences.

Directly after the terrorist attacks on 9/11, airports were closed by the federal government, cancelling thousands of flights at direct airlines price. Nevertheless, even when the airports reopened, travellers were wary about air travel, and airlines experienced at least a 30% reduction in demand during the initial shock period immediately after the reopening. However, business travel accounts for one of the airline industry ‘ most lucrative segments, and a small number of businesses temporarily suspended non-essential travel for their employees after the attacks.

The week after the attacks, Congress established a law establishing the Air Transportation Stabilization Board, a body allowed to lend up to $10 billion to faltering airlines. Notwithstanding this government-funded initiative, several major American airlines, including US Airways and United Airlines, declared bankruptcy not long after the 9/11 attacks. As a result of massive financial losses due to lack of passenger demand, cancelled flights and increased security expenditure, even airlines with no prior financial issues were forced to renegotiate labour contracts and lay off high numbers of employees, such as the 7,000 American Airlines employees laid off.

Established on November 11, 2001, one of the most significant and long-term consequences of the 9/11 attacks was the Transportation Security Administration (TSA) and its reform of airport security procedures. Although the expanded airport security measures do not directly affect airline operations, the new process has resulted in a substantial subset of airline passengers opting for alternative modes of transportation or skipping altogether. A 2007 economic study by Cornell University showed that federal baggage screenings resulted in a 6% reduction in the volume of passengers across the board, with a 9% reduction in the nation’s busiest airports, totalling almost $1 billion in losses for the aviation industry.

Some claim that the airline industry’s negative financial impact after the 9/11 attacks also hastened a sooner or later industry reorganisation. Before these incidents, several airlines, including US Airways, which filed for bankruptcy following the attacks, had long-standing financial problems. Despite better financial times in the 1990s, many airlines had over-stretched, signing plump deals with employers and buying new aircraft. Following 9/11, the drop in passenger demand forced airlines to tighten their belts, renegotiate deals, and ground planes. This trend could also have been caused by increased competition from competitive low-cost airlines over a longer timeline.

Due to their plentifulness and the stun, they caused within the United States and within the world, the assaults of September 11, 2001, made a solid effect on the American tourism and lodging division. The drop in inhabitance rate at American lodgings was prompt taking after September 11 and proceeded over the taking after five months. After a ponder by Renáta Kosová and Cathy A. Enz distributed within the Cornell Hospitality Quarterly in 2012, the inhabitance rate is the pointer that experienced the foremost flagrant drop after the assaults, bringing the Income per accessible room (RevPAR) with it. This is often perception has to be considered inside the setting of 2001 when energetic cost approaches were not however broad all through the lodging industry; it is in this way more the advancement of the RevPAR that permits it to be put back in point of view. In September 2001, America’s national RevPAR dropped by 20% to 25% month to month compared with the final year, and in New York and Washington, the degree fell still more significantly (30 to 40%), and was struck straightforwardly. The foremost visitor goals all through the nation (Honolulu, San Francisco, Boston, etc.) have endured from the impacts of the assaults more feasible, especially as respects remote entries. This can be moreover genuine for American cities that have tall volumes of commerce visitors, due in specific to a diminish in participation at conferences and traditions, and cancellations. Considering the weight of the American economy, lodgings within the nation were not the as it were businesses affected: the inn industry around the world entered a downturn. But we must keep in mind that September 11 created no less than 2,977 casualties for the worldwide financial leader, which had never experienced such assaults on its own territory, which caused the New York Stock Trade to shut and all airline activity was perturbed.

In New York, contrasts in effect may be watched between the distinctive inn ranges, as the thinks about by Renáta Kosová and Cathy A. Enz remind us. At first, the upscale fragment was particularly affected but was at that point able to re-set its pointers speedier than lodgings in other categories. On the opposite, autonomous lodgings and inns within the economy categories at first endured less from repercussions from the assaults, but their inhabitance rate took longer to return to ordinary.Generally, it wasn’t until January 2002 that there was a bounce-back in movement, meaning that the effect of the assaults on the household lodging industry may well be felt for almost 3 months.

Another identity of the assaults on September 11, 2001 – due to their degree and geopolitical repercussions- was moreover their worldwide effect on tourism around the world. Concurring to figures from the World Tourism Organization, the final four months of the year saw an 11% drop in travellers around the world: the drop was especially checked within the Americas (-24%) and the Middle East (-30%). It would take until 2004 to watch a genuine development recuperation for the stream, with a noteworthy increment in international entries around the world. Within the United States, it is additionally in 2004 that tourism incomes (residential and worldwide guests alike) at long last caught up with their pre-9/11 levels.

MKG Hospitality measured the effect of the 9/11 assaults on France’s hotel industry: the national RevPAR dropped by 6% in September 2001, 13% in October, 7% in November, recently recapturing about steady in late January.

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