CHICAGO – News of four airplane crashes on Tuesday led to the grounding of U.S. airlines, an event certain to cement 2001 as one of the worst years ever for the aviation industry, experts said on Tuesday.
Already battered by a slump in business travel, high jet fuel prices and rising labor costs, industry experts had expected the U.S. airline industry to lose about $2 billion to $3 billion prior to the presumed terrorist attacks in New York and Washington.
Those numbers could rise, as companies and individual travelers pull in the reins even further, experts said.
``This could go down as the single worst year,'' said Kevin Mitchell, chairman of the Business Travel Coalition.
The worst year for airlines until now came in 1992, when an estimated $4 billion was lost, according to Goldman Sachs analyst Glenn Engel. For the early 1990s overall, about $13 billion was lost.
Mitchell said he had already surveyed about 300 travel managers in corporations throughout the country Tuesday who were discussing plans to halt travel throughout the week.
``It's not good news for the airlines, obviously, at a time like this,'' Mitchell said. ``Typically, when you have an air disaster, travel falls off for a week or 10 days. This is mind-boggling on a number of levels.''
Two jets crashed into the World Trade Center twin towers in New York and another into the Pentagon in Washington. Both towers of the Trade Center collapsed about two hours later. Another airliner -- UAL Corp.'s United Airlines Flight 93 Boeing 757 carrying 38 passengers -- crashed near Johnstown, Pennsylvania. United pilots confirmed that Flight 175, a Boeing 767 carrying 56 passengers, was the one that crashed into one of the Trade Center towers.
The other crashed jets, another Boeing 757 and another 767, were operated by AMR Corp.'s American Airlines, based in Fort Worth, Texas.
The four planes carried a total of 233 passengers, 25 flight attendants and eight pilots.
Carriers across the country issued statements saying all flights nationwide would be grounded for the first time ever throughout the day until the U.S. Federal Aviation Administration gave the all-clear signal.
The FAA as of midafternoon Tuesday said all flights were to be halted until midday Wednesday.
Kevin Logan, senior market economist at Dresdner Kleinwort Wasserstein, said airlines would be hurt by the day's events. ''No one's going to travel,'' he said. ``Travel is likely to decrease.
Others in the financial industry agreed.
``I don't know how the airline industry is going to survive it,'' said Stanley Nabi, managing director at Credit Suisse First Boston. Nabi canceled all of his flights for the next two weeks.
Howard Kornblue, an Arizona-based portfolio manager, also was thinking about changing plans. ``I have a business meeting coming up in New York next month and I'm going to have to reassess,'' said Kornblue.
``Gosh, after you see something like this you want to think it through -- is it basically safe to travel?''
AIRLINES ACCEPTING CHANGES
Many airlines said they would work with passengers to accommodate
Midwest Express Holdings Inc., for example, said it will work with all passengers to meet their travel needs by waiving change fees and refund rules for those scheduled to travel until Sept. 17. The Milwaukee, Wisconsin-based airline said travelers could extend their outbound and inbound travel dates for up to one year from the date of ticket issue.
American Trans Air said all passengers with tickets for travel through noon Wednesday could rebook, cancel or change plans without penalty.
Aaron Gellman, a professor at the Transportation Center at Northwestern University, said the overall effect on the economy could be devastating, too.
``The airlines are the most vulnerable and would be most affected by this,'' Gellman said. ``It's impossible to predict with any precision what's going to happen. This is a very important, watershed event.''
Gellman said anyone trying to predict traffic patterns going forward would have a very tough time. ``Every forecast you made, at least for the next couple of years, is probably off.''