“Airline industry bailout and 9/11”
(Note to customer: the Map of Freedom 2005 does not have any information relevant to the airline industry bail-out, and the World Bank site given does not have a map.)
As noted by Wytkind (2002), it was immediately evident in the wake of 9/11 that “travel in America would never be the same” (Wytkind 2002) and that the airline industry would be “the first to bear the brunt of the economic consequences of this . . act of terror” (Wytkind 2002). Young (2003) states that the effects of the attack on the industry were “direct and far-reaching” (Young 2003): in the short term, commercial airlines lost millions of dollars in revenue whilst their aircraft were temporarily grounded. In the longer term, as Young points out, “passenger traffic never fully recovered because of public anxiety” (Young 2003). This was partly due to increased insurance costs; however, revenue was also affected by the fact that tighter security restrictions have “hampered the airlines’ ability to carry freight and mail” (Young 2003). Air carriers have also claimed that even though added costs should have been funded from the public purse, Congress has not yet provided reimbursement for the added costs incurred by the airlines. The first response to the problems caused by 9/11 was a $15 billion assistance package; however, as Young notes, despite this aid the ATA reported $10 billion losses in 2002, at the same time forecasting further losses in 2003. We therefore have to consider the events of 9/11 and the government’s response in the light of wider considerations relating to the airline industry, and to national and international security as a whole.
Wolk (2001), for example, states that even before 9/11 the airline industry had already been negatively affected by a slowing-down in the overall economy, leading to reduced demand for business travel. Dokupil (2003) addes that the