Transformation in the U.S. Airline Industry since 9/11

2007 marks the first time that the United States airline industry will be profitable since the terrorist attacks on Sept 11, 2001. Over the past five years, the industry has lost a cumulative $40 billion through the combined pressure of severely reduced passenger loads and rising fuel prices.

The airlines could not pass rising operating costs on to customers because of intense competition and low passenger demand.  Instead, they turned to cost cutting in the forms of reduced ground staff, eliminated in-flight meals and charging for curbside check-in.

For many airlines, these service-related cost cutting measures were not enough. Bankruptcy became an attractive option because it offered companies a way to back out of labor agreements, default on pension plans for retired workers and prematurely terminate facility contracts.

Out of the six major U.S. carriers, only American Airlines has been able to get through the turbulent years post 9/11 without filing for bankruptcy.  

Read the whole article by our Regional Representative in the US, Ms. Sonja Källström, here!