Impact of the Terrorist Attacks on the
Airline Industry and Its Customers
Passenger Volume Trends
The week before the attacks (Sept. 4-10), U.S.
airlines carried about 9 million passengers, up 1% from last year.
The 6-day week of the attacks (Sept. 11-16) – about
2 million passengers, down 75% from last year.
The first full operational week after the attacks
(Sept. 17-23) – about 5 million passengers, down 49% from last year. The following week (Sept. 24-30) – about 6 million
passengers, down 36% from last year.
Last week (Oct. 1-7) – about 7 million passengers,
down 27% from last year.
As a result, airlines have been forced to pull down
roughly 20% of seats and departures. While these numbers reflect system-wide results,
international traffic levels have taken the heaviest beating, and will
continue to as the U.S. military response progresses and diversifies.
Airlines have taken a staggering
blow but over the last three weeks have been able to regain about one
million passengers each week. Nonetheless, the most recent week ended
down 27% from a year ago. We are hopeful that the traffic keeps coming
back as a result of recovering consumer confidence in the economy and
in safety, particularly with respect to the new security measures.
Since September 11, hundreds of companies, in the
U.S. and abroad, have announced thousands of layoffs.
As of October 12, U.S. airlines had announced some
94,000 layoffs, representing about 17% of the workforce.
Foreign carriers had announced another 30,000, or 14%
of their workforce.
Add to those totals 41,000 in aerospace firms, 9,000
in airline services, and 30,000 in non-airline travel companies (e.g.,
car rentals, travel agencies, cruise lines, hotels).
We know that for every one airline job, there are 15
non-airline employees in the U.S. whose jobs depend on air travel and
air cargo. The result is over 10 million jobs in the U.S. economy
related to aviation.
We hope to recall as many of the
furloughed employees as early as possible, based on the recovery in
demand and the success of security legislation.
The total financial impact to the U.S. airline
industry – strictly in incremental terms related to the attacks –
is estimated at $24 billion in cash losses through June 30, 2002,
based on a range of $18 to $33 billion.
Of that amount, roughly $5 billion was incurred the
last 20 days of September alone.
Revenues are expected to decline from pre-September
11 forecasts as follows:
40% in 4Q01,
25% in 1Q02,
15% in 2Q02.
Aviation’s contribution to the GDP is on the order of
4%. When considering the ripple effects on other businesses and their
dependence on us for the overall movement of people and goods, figures
range in the double-digits.
In 2000, the estimated airline economic impact in
Florida was as follows:
Employees: 40,676 (roughly "tied" for
third highest with GA, NY, IL, CA, TX @ 70,000-plus)
Passengers: 51 million (solid #3 behind CA, TX)
Departures: 525,000 (#3 behind CA, TX)
Cargo Tons: 870,000
PFCs: $147 million (#2 in U.S. behind CA $162m)
516 North Adams Street ● Post Office Box 784 ● Tallahassee, Florida 32302-0784 ● Phone: (850) 224-7173 ● Fax: (850) 224-6532 ● www.aif.com