Fear of flying following the September 11th hijack and crashing of four domestic flights killing all aboard led to a drop of one-third in the number of people travelling by air in the United States in September, and to record losses for American Airlines, the world's leading air carrier.
AMR Corporation, the parent company of American Airlines, yesterday reported a loss of $414 million (€464 million), or $2.68 a share, for the July-September period, compared with net income of $322 million, or $1.96 a share, in the same quarter last year.
Chairman and chief executive Mr Don Carty, who, along with other executives, has given up his salary for the rest of the year to reduce costs, said the attacks had a "staggering effect" on the airline's financial situation.
Confirmation of a drastic fall in passengers post-September 11th came from the US Air Transport Association (ATA), which said in a report that passenger numbers were down 34.2 per cent on average in September, against a background of slowly growing passenger numbers over the year. Domestic revenue per passenger miles fell 32.5 per cent, while internationally it declined 30.1 per cent.
"The economic impact from the tragic events of September 11th continues to be unparalleled in the history of commercial aviation," said ATA president and chief executive Ms Carol Hallett.
Referring to the Bush Administration's $15 billion bailout to prevent airlines going bankrupt, she said: "Make no mistake. We are grateful for the leadership of President Bush and the Congress in providing emergency economic stabilisation assistance.
"However, this will be a slow recovery.
"For example, the week before the terrorist attacks, we carried about nine million passengers.
"In the first full operational week after the attacks, passenger traffic plummeted by almost 50 per cent, to about five million passengers."
The figures raise the possibility that airlines will scale back services even more than they have already done.
One in five domestic passenger planes in the US have been grounded since September 11th. Analysts say the number of people travelling by air six weeks later is still down around 28 per cent.
Shares of AMR hovered yesterday just below $20.
The stock has shed about one-third of its value since the September 11th attacks, in which American Airlines lost two planes, and has underperformed the broad Standard & Poor's 500 index by 40 per cent since the start of the year.
AMR said the third-quarter results included $397 million in special charges for the attacks and a credit of $508 million from government emergency aid for the airline industry. The numbers were broadly in line with Wall Street expectations.
Even before September 11th, AMR warned that a slump in business travel and high fuel prices meant it was likely to post a loss for the second half of 2001.
American Airlines has cut capacity by 20 per cent and announced about 20,000 job cuts in September from a total workforce of 138,000 at American, TWA and regional carrier American Eagle.
"In US airlines nationwide, a drop in ticket prices coupled with a passenger traffic decline resulted in revenues falling by 45 per cent," said ATA chief economist Mr David Swierenga.
"September's revenue results are a vivid reminder of why emergency economic stabilisation assistance was vital to the continued viability of the airline industry."
