Introduction

The terrorist attack on the New York World Trade Center and the Pentagon on September 11, 2001. At 8:46 a.m., American Airlines Flight 11 hit the north tower of the World Trade Center. Then United Airlines Flight 175 crashed into the trade center's south tower. The airline and travel industry were the worst hit of all industries. This is a review of the situation before and after 9/11 on industry of these attacks and an overview of responses both by government and on industry to the event.

Before 9/11

After 9/11

Situation before 9/11 STEP

Social Factors:- The demand for air transport was basically
caused by a rising world GDP, an increasing world trade and investment liberalization of markets. Between 1990 and 2000 airlines benefited from an increasing number of tourist passengers from 450 million up to 700 million. The main reasons for people to fly were leisure and business trips. Traveling by plane was also a symbol of wealth and success.

Technological Factors:- There has been made huge steps

in airline technology, with the invention of more efficient engines the demand for long-distance flight could be satisfied. The internet opened a whole new and cheaper distribution channel for airlines. Furthermore airlines could improve their non-core services to get competitive advantages towards other airlines for example TV screens in the seats or faster boarding with new boarding systems.

Cont

Economical Factors :-There was an increasing of US

passengers traveling with planes of 160% between 1978 and 2000 (almost 660 million passengers) Through the year 2000 the operating costs for airlines went up constantly caused by higher fuel prices and rising labor costs furthermore the widening of the non-core services of airlines caused immense costs. Airlines reacted on that with reducing labor and cutting costs. Furthermore many airlines started out-sourcing their non-core services and activities in order get back to the core-service and to save costs.

Political factors:-Basically the industry was fragmented from

the constraints of national and international regulations, politics and public ownership. These small impacts were in the form of landing rights and competitive restraints.

Situation after 9/11 STEP

Social Factors:- The attacks of 9/11 led to a declining of
bookings of 74% of US domestic flights and 19% worldwide in the first four days. People were afraid of using air travel. Furthermore the longer check in times because of higher safety standards increased the doortodoor traveling time and customers were looking for alternatives such as video conferencing, using the car or the train. Furthermore customers were not willing to pay the prices they paid before 9/11.

Technological Factors:-Airlines invested huge amounts of

money into new security systems and safer cockpit doors the changeover of the aircrafts caused enormous costs.

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Economical Factors:-After 9/11 the economy was facing

a recession. Stock market was completely closed for a week, sectors like insurance airlines decimated. Many airlines were facing bankruptcy. Furthermore insurances raised their premiums up to 500% which increased operating costs for airlines.

Political Factors :-Immediately after 9/11 the government

increased security standards in airports and aircrafts, which of course caused higher operational costs for airlines. The government provided the aviation industry an emergency assistance of $ 15 billion only ten day after the attacks. In 2001 President Bush introduced a very controversial security tax, which every customer had to pay. In 2003 a US District Court decided that a hijacking is a risk which is foreseeable, this was the goahead for family members of the airplane passengers of the 9/11 flights to sue the airline industry.