To Victor Latimer, the events of Sept. 11, 2001, play out in black and white.
The owner of a skycap service at Tulsa International Airport, he remembers showing up and looking at unaware passengers as their planes were diverted. Flight attendants were visibly shaken, he said, because they worried about their friends as details of the terrorist attacks played out and airlines scrambled to find a handful of unaccounted for planes.
"It was a very strange day," he said. "It changed the whole way we did things at the airport. Within a couple of days there were security at the curb with mirrors checking underneath cars."
A dozen years later, the airline industry continues to reshape in ways unanticipated before the terrorist attacks that killed 2,996 people in New York; Washington, D.C.; and rural Pennsylvania.
Even the ongoing antitrust lawsuit from the Department of Justice against the merger of American Airlines and US Airways can be traced back to the devastating effects that the terrorist attacks had on the airline industry and a series of bankruptcies and consolidations that followed over the next decade.
In 2001, airlines were already expecting to take a $3 billion to $4 billion loss after years of steady profits. Airlines were chasing market share over profits and passengers over revenues.
"Profit was way down on the list of priorities," said Robert Herbst, an industry analyst with
Airlinefinancials.com.
To be fair, Herbst said, the events of Sept. 11, 2001, didn't cause the turmoil and consolidation of the last five years, but did hasten the events.
Dozens of major airlines declared for bankruptcy over the next four years, including Delta Air Lines, Northwest Airlines, United Airlines and US Airways, twice. American Airlines held out, only with steep concessions from employees and the airline did eventually file for reorganization in 2011.
Airlines struggled to cut costs left over from 25 years of the deregulation and spent 2002 to 2005 clawing back to profitability.
Although bankruptcy helped profitability for a few years, fuel prices cut hard into industry profits. Herbst said fuel accounted for about 9 percent of the price of a ticket in 2001, compared to nearly 40 percent today.
New security programs, including the creation of the Transportation Security Administration, hurt short-distance travel for airlines because of the time it added for business travelers, said John Heimlich, the chief economist for Airlines for America, an air carrier trade group.
"I think what happened, happened in a far faster and more profound way because of 9/11," Heimlich said.
Federal agencies took about $3.8 billion in security fees from passengers in the United States in 2012, while the industry as a whole only made a $1.39 billion profit, according to data from the U.S. Bureau of Transportation Statistics.
With the economic downturn starting in 2007, investors grew wary of airlines' chasing passengers and market share, Heimlich said.
Since 2008, the industry has seen nine major merger deals, including the pending plan to combine American Airlines and US Airways to form the world's largest airline.
What's left is a collection of bigger airlines that operate much smaller. U.S. airlines have cut about 167,000 jobs since the beginning of 2001 and carriers now fly fewer routes with more passengers to save money and fuel.
Tulsa International Airport now supports just four major carriers after the merger of United Airlines and Continental in 2010. Like other airports, total passenger numbers at Tulsa International have declined steadily since 2001.
Latimer had more than 20 employees at Tulsa International Airport, but now has just seven as airlines have moved to self-service kiosks, another attempt at cutting costs.
"I just remember talking to my business partner and saying that everything was going to change," Latimer said. "I knew they weren't going to let us check bags at the curb for a while, but I never expected was going to happen."
Kyle Arnold 918-581-8380
kyle.arnold@tulsaworld.com
Original Print Headline: 9/11 Hastened, Didn't Cause Airline Woes
Aerospace
The first addition to the Boeing 787 family took off Tuesday from Paine Field, near the factory where the plane was assembled, to the cheers of a couple of hundred Boeing Co. employees who watched the blue and white plane with a number 9 on the tail rise into a cloudy sky.
Bombardier's CSeries aircraft completed its maiden flight Monday in a successful test run of the new narrow-body airplane.
