The Terror Attack In The US And The Airline Indust

Essay by EssaySwap ContributorUniversity, Master's February 2008

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The terror attack in the US and the airline industry: Is September 11th the only cause for the airline industry's current situation? 1. Introduction 2. Claim: The attacks are the cause for the airline industry's current situation.

2.1 Situation before September 11th and its reasons - Market situation - Labour agreements and limited flexibility - Mismanagement and national protectionism 2.2 Examples - Swissair - Sabena - Airbus and Boeing 3. The airline industry's claim: The attacks are the reason for the dramatic siutation.

4. Conclusion 1. Introduction: On Tuesday, September 11th, the whole world was under shock. That day, four airplanes were used as flying bombs in the terror attacks in the United States and more than 5000 people have been killed. Consequently, public confidence in air travel, which is supposed to be the safest way to travel, was badly shaken.

In the week after the attacks traffic on US airlines fell by 35 percent and in the rest of the world by 20 to 25 percent.

The attacks have brought the airline industry to its knees, triggering millions of losses and making about 120 000 employees redundant until today.

William Warlick, an analyst for the bond-rating company Fitch, reports that as of late October, Delta, United, US Airways, Continental and Northwest were all losing between $5 and $15 million in cash per day. Due to this one can conclude that a company losing $10 million a day needs $3.65 billion to stay in business a year. As Warlick says, at the end of September, Delta had $2,8 billion in cash, United $2.7 billion, US Airways $1 billion, Continental $1.2 billion and Northwest $2.8 billion. Trusting in this, even the big American carriers would be out of cash soon. But is this situation solely due to the terror attacks? 2.