The two-day shutdown of airports across the country immediately following the attack, the heavy cost of new security measures, the limited startup of flights over the following days, and continuing low patronage have piled losses on companies in a year already marked by economic slowdown and intense price competition for customers.

Announced cutbacks in airline staff are 65,000 and rising. The two largest airlines, American Airlines and United, said September 19 that they would each eliminate around 20,000 jobs--15 percent and 20 percent respectively of their payrolls--and one-fifth of their pre-September 11 schedule.

Continental Airlines, the fifth-ranking airline, announced four days earlier that it will lay off 12,000 of its 56,000-strong workforce. Company executives said the decision was sparked in part by the cost of implementing the beefed-up security measures demanded by the government. The airline reported losses of $33 million in the year to June. A number of major airlines racked up larger deficits over the same period.

Other companies, such as U.S. Airways, America West, and America Trans Air have also announced staff reductions. North Carolina-based Midway Airlines, already in Chapter 11 bankruptcy proceedings, closed its doors the day after the attacks, dismissing 1,700 employees.

"Even before Tuesday's attacks," reported the September 15 New York Times, "a sharp decline in the number of high-paying business travelers, combined with high fuel prices and expensive new labor contracts, have sent most major carriers into the red." The industry would "emerge much smaller" from the current shakedown, predicted the paper.

Legislators have "rushed to complete an aid package for the airlines," reported the Times on September 19. Industry executives have placed a shopping list before a congressional committee of a $5 billion cash infusion and $12.5 billion in loan guarantees. The Internal Revenue Service agreed to the airline companies' demand to defer the payment of hundreds of millions of dollars in ticket taxes that have already been collected from passengers.

In addition, United Airlines and American--the companies whose flights were hijacked--are pressing for legislation to limit their liability in the face of likely law suits stemming from the attacks.

The ripple effects of the crisis in the industry are already being registered. Boeing, the world's largest aerospace company, has announced plans to lay off between 20,000 and 30,000 people in its workforce of almost 200,000 people, in the expectation of a steep decline in orders.

The airlines' woes were the most prominent features in the first days of trading on Wall Street, which reopened on September 17 after a four-day closure. In the first day's trading the stocks of the three largest airline companies slumped by 40 percent. Overall, the Dow Jones industrial index fell almost 9 percent in three trading days. The decline in the Nasdaq index was 10 percent.

Capitalist pundits are already calling for airlines to "put their house in order," in the words of the Investor Business Daily. The paper quoted analysts calling for cuts in wages and salaries.  
 
 
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