Introduction
The September 11, 2001 terrorist attacks had a significant effect on the American population and economy. Religious extremists commandeered commercial planes and deliberately crashed them into New York City’s World Trade Center and the Pentagon. These violent acts impacted not only Americans but also had far-reaching consequences for both the United States and the global community.
This text examines the state of the United States economy before a tragic event occurred, which caused a decline. However, the bombings had a major effect, leading to an economic depression. The industry that was most affected by this impact was the airline and travel sector. This evaluation analyzes the condition of this industry prior to 9/11, explores the consequences of the attacks, and investigates how both government and industry responded to this event.
Situation before 9/11
- Social Factors The demand for air transport was basically caused by a rising world GDP, an increasing world trade and investment liberalization of markets. Between 1990 and 2000 airlines benefited from an increasing number of tourist passengers from 450 million up to 700 million. The main reasons for people to fly were leisure and business trips. Travelling by plane was also a symbol of wealth and success.
- Technological Factors There has been made huge steps in airline technology, with the invention of more efficient engines the demand for long-distance flight could be satisfied. The internet opened a whole new and cheaper distribution channel for airlines. Furthermore airlines could improve their non-core services to get competitive advantages towards other airlines for example TV screens in the seats or faster boarding with new boarding systems.
- Economical Factors There was an increasing of US passengers travelling with planes of 160% between 1978 and 2000 (almost 660 million passengers) Through the year 2000 the operating costs for airlines went up constantly caused by higher fuel prices and rising labour costs furthermore the widening of the non-core services of airlines caused immense costs. Airlines reacted on that with reducing labour and cutting costs. Furthermore many airlines started out-sourcing their non-core services and activities in order to get back to the core-service and to save costs.
- Political factors Basically the industry was fragmented from the constraints of national and international regulations, politics and public ownership. These small impacts were in the form of landing rights and competitive restraints.
Situation after 9/11
- Social Factors The attacks of 9/11 led to a declining of bookings of 74% of US domestic flights and 19% worldwide in the first four days. People were afraid of using air travel. Furthermore the longer check in times because of higher safety standards increased the door–to-door travelling time and customers were looking for alternatives such as video conferencing, using the car or the train. Furthermore customers were not willing to pay the prices they paid before 9/11.
- Technological Factors Airlines invested huge amounts of money into new security systems and safer cockpit doors the changeover of the aircrafts caused enormous costs.
- Economical Factors After 9/11 the economy was facing a recession. Stock market was completely closed for a week, sectors like insurance airlines decimated. Many airlines were facing bankruptcy. Furthermore insurances raised their premiums up to 500% which increased operating costs for airlines.
Carriers faced a decline in customers due to their fear of long-distance flights, which also led to a decrease in business flights. In order to address the decrease in bookings and the demand for lower prices, Full Service Carriers implemented an extensive cost-cutting program, which involved reducing their workforce.
Low Cost Carriers differentiated themselves from Full Service Carriers by implementing two strategies: launching campaigns to regain customer trust in flying and providing appealing and extremely affordable packages. Consequently, these carriers not only enhanced their market position but also effectively attracted new customers.
After the 9/11 attacks, the government implemented stricter security measures for airports and airplanes. This resulted in higher costs for airlines. In order to assist the aviation industry, the government quickly provided $15 billion in emergency aid within ten days of the attacks. President Bush introduced a contentious security tax in 2001 that applied to all customers. A US District Court ruling in 2003 established that hijackings are foreseeable events, allowing family members of passengers on the 9/11 flights to file lawsuits against the airline industry.
Conclusion / Recommendations
Following the aftermath of 9/11, the airline industry faced a substantial and aggravated downturn in finances. To restore profitability, it is essential to undertake several steps including increasing consumer interest in air travel, specifically for business purposes, controlling expenses, and addressing specific pricing issues. Congress has approved multiple initiatives supported by the President to assist in the recovery of the airline industry as a response to the terrorist attacks. Nevertheless, the future prospects of the U.S. airline industry remain uncertain in the long term.
To address ongoing structural issues and enhance cost reduction initiatives, the airline industry needs to prevent future bankruptcies. Nevertheless, if the Federal Reserve chooses to raise interest rates or if the government raises tax rates, this will result in increased costs for investments within the sector and adversely impact profitability.
Thus, the structure of the airline industry is greatly influenced by economic policies and changes in the economy. This sector is extremely responsive to policy alterations and highly sensitive to them. Additionally, following the 9/11 attacks, the security industry experienced significant growth as new security guidelines were implemented. The main focus shifted towards ensuring security and deciding on its implementation strategies. As McCamey (2001) points out, multinational corporations are increasingly relying on private security organizations due to persisting terrorism threats. Consequently, numerous companies sought to enhance their building’s security measures for safeguarding their employees.
Embree and Wicks (2003, p. 35) state that as the need for protection of people and assets rises, it is equally crucial to supervise and manage individuals who need entry to protected areas. There are various methods to achieve this, including incorporating CCTV cameras in workplaces or improving security measures concerning building access. The airline sector has been one of the quickest in enhancing its security, specifically after the terrorist attacks with hijacked airplanes. This industry had to implement new security measures to guarantee passenger safety during flights.
After the terrorist attack on the United States, President Bush designated twenty billion dollars to improve intelligence and security. These improvements encompassed more stringent background checks and baggage check demands (McCamey, 2001). The responsibility of security professionals is intimately connected to the notion of terrorism. As defined by the Federal Bureau of Investigations (FBI), terrorism entails using force or violence unlawfully in order to intimidate or coerce a government or civilian population for political or social goals (Conley, 2003b, 198).
It is a concerning reality that terrorists operate amidst our daily lives (Conley, 2003b). The role of security officers is crucial in combating terrorism, particularly in high-traffic establishments serving millions of travelers from around the world. This responsibility has become more significant following the 9/11 attacks (Conley, 2003b). Security officers are employed to safeguard the assets they are assigned to protect (Conley, 2003a). According to Tom M. Conley, security officers are at the forefront of this effort (2003b, 200).
Security officers have a deep understanding of their work environments, allowing them to quickly identify and address any slight irregularities. This sets them apart from law enforcement personnel like the FBI or CIA who are not employed by airports. In addition to observation and patrol, security officers are responsible for activities such as conducting baggage and vehicle checks, screening passengers and personnel, and operating detection equipment like x-ray machines.
The airline industry has added new requirements in addition to the responsibilities of a security officer. The Transportation Security Administration (TSA) has set short-term and long-term goals for these measures, which were implemented in November 2001 to enhance security during the busy Thanksgiving and Christmas holiday seasons. Congress passed the Aviation and Transportation Security Act (ATSA) on November 19, 2001 to establish these regulations (Abrams, 2001).
The ATSA established the Transportation Security Administration (TSA), which was previously under the Department of Transportation. However, when the Homeland Security Act was passed on November 25, 2002, the TSA was transferred to the Department of Homeland Security (Dillingham, 2003). The main goal of creating the TSA was to improve airline security after the events of September 11, 2001. As a result, around 65,000 new federal employees were hired shortly after its establishment. The quick implementation of new rules led to the development of both short-term and long-term objectives.
According to Jim Abrams, one of the immediate objectives was to implement criminal background checks on 750,000 airport employees. Additionally, there was a plan to increase law enforcement presence and screen all checked baggage using methods like X-ray machines and hand inspections. Another goal was to deploy more air marshals on flights and enhance pre-screening of passengers by cross-checking with FBI and other watch lists for potential threats (2001). In 2003, Tom Ridge, leading the Department of Homeland Security, decided to bolster the number of air marshals by 5,000 (Regional, 2003).
Abrams (2001) stated that the implementation of new security measures on airlines had both immediate and prolonged consequences. The short-term effects were anticipated to manifest within the initial year of execution. On the other hand, the long-term effects encompassed the creation of a fresh agency within the Transportation Department responsible for supervising all transportation security protocols. Furthermore, all 28,000 airport baggage screeners transitioned into federal employees, and scrutinizing checked baggage using explosives detection machines became mandatory. Trustworthy-passenger initiatives were also slated for introduction, utilizing innovative technologies to identify passengers swiftly during screening.
The proposed regulations aim to guarantee the safety of both baggage and passengers when traveling by air. According to the Transportation Security Administration (TSA), they have confiscated more than 4.8 million forbidden items, including firearms, knives, and flammable objects from passengers (Dillingham, 2003, p. 8).
According to the Department of Homeland Security, airport screeners have discovered more than 7 million items since February 2002. These items include 1,437 firearms, 2.3 million knives, and 49,331 box cutters – the preferred weapon used by terrorists on September 11th. Some individuals have even attempted to conceal razor blades in their tennis shoes (Gips, 2003).
The events of September 11th have demonstrated that a passenger can be as dangerous as a bomb on an airplane. Therefore, it is necessary to not only search passengers’ carry-on baggage but also conduct searches on passengers themselves for weapons. Passengers have also noticed an increase in security measures.
The scrutiny for carry-on luggage has significantly increased, with more hand searches of bags and thorough searches using wands and pat-down procedures instead of just metal detectors (Abrams, 2001). Moreover, even individuals who are picking up someone at the airport now have their vehicles checked for bombs upon entering, with each car inspected by a security officer. Additionally, there have been changes in regulations regarding both carry-on and checked baggage. Air travelers are now limited to one carry-on bag and one personal item on all flights” (Airport, 2003).
Passengers at the airport are required to show a government-issued photo ID during check-in, and this ID may also be verified at various locations within the airport. Individuals with an E-ticket must also provide proper documentation of their reservations from the airline (Airport, 2003). Moreover, there is now a restriction on the number of people allowed in the gate area, whereas previously anyone could accompany their loved ones and observe the plane’s departure.
As a result of the attacks, only passengers are allowed to pass through screening checkpoints and reach the gate. Despite other tragic incidents, the 9/11 terrorist attacks continue to be the most memorable in our nation’s history. Even after three years, the exact number of casualties remains uncertain, and victims and their families continue to search for comfort. The events that occurred on September 11, 2001 served as an important reminder for the airline industry, leading to significant improvements in security measures.
Currently, security professionals have a broad range of responsibilities. Despite the time that has passed since the 9/11 attacks, airline security measures remain strict. However, individuals have adjusted to these regulations and no longer express dissatisfaction with the long wait times and time constraints they involve. People now understand that these rules are necessary for their safety and have accepted the inconvenience of longer lines and earlier arrivals at airports as a required procedure. These updated security protocols are now firmly established.
