The travel industry has been hit hard by the Sept. 11 terrorist attacks and last week's crash of American Airlines Flight 587. Airlines have been cutting domestic and international routes, and on Nov. 1, the parent company of Alamo and National car rental companies filed for bankruptcy.
Although airlines had been performing poorly for months before the terrorist attacks, the events of Sept. 11 caused a precipitous drop in air traffic. According to figures released by major airlines, including Northwest, Continental and U.S. Airways, carried about a third less traffic this September than they did during the same month last year, and United and Southwest carried about 20 percent less traffic. These figures did not improve markedly in October, showing decreases of about one third versus October 2000.
In response, during the weeks immediately following Sept. 11, United, U.S. Airways, Northwest and Continental announced capacity cuts of between 20 and 25 percent, as well as layoffs of up to 20,000 employees. Southwest Airlines, on the other hand, did not cut schedules or conduct layoffs, and saw traffic levels in October that essentially were unchanged from October 2000 levels. It is estimated that a total of around 100,000 aviation jobs have been lost as a result of the terrorist attacks, including layoffs of 30,000 Boeing employees.
Airlines have been trying to increase passenger traffic by slashing fares and increasing advertising (See other story). Every major airline has held fare sales after Sept. 11, and many are offering added incentives like double frequent flyer miles. In addition, Congress approved a $15 billion airline relief bill that was signed into law Sept. 24. It is intended to prevent airlines from going bankrupt or out of business.
Airlines, however, are not the only sector of the travel industry to suffer ill-effects resulting from the events of Sept. 11. Hotel and rental car agencies also report decreased revenues in September and October. Last Tuesday, ANC Rental Corp., parent of Alamo and National car rental agencies, filed for Chapter 11 bankruptcy.
ANC's Chairman and CEO, Michael Egan, cited in an October press release that the "drastic decline in travel after September 11" as the reason for the move. "We are seeking the protection and relief provided by Chapter 11 to allow us to continue serving customers while we stabilize the business," Egan said.
According to ANC, Alamo and National will honor existing and future reservations, and customers should not notice a difference in service. ANC is the nation's fourth-largest car rental company.
Hotel chains like Marriott and Six Continent Hotels, owners of the Holiday Inn brand, have also introduced new sales and promotions since Sept. 11 to stimulate consumer interest and draw travelers to their properties.
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