Kim Cameron and Jon McNaughtan
On September 11, 2001, two hijacked planes were used by terrorists to attack the World Trade Center towers, a third plane was flown into the Pentagon, and a fourth plane crashed on a field in Shanksville, Pennsylvania. In total, 2,996 people were killed and over 6,000 were injured. The effects of that tragic day were far reaching, of course, but no industry was hit harder than the U.S. airline industry. Not only did national governments worldwide prohibit airline flights for the next several days, but passengers were fearful that this industry, in particular, was the primary target of terrorists. Fear was rampant, and passengers were reticent to return to the air.
In particular, the short-haul carriers—the two companies most heavily dependent on short flights—were abnormally affected. Passengers chose trains, buses, or automobile travel instead of airline flights for relatively short distance travel. US Airways and Southwest Airlines were the two firms hurt the worst financially, although virtually every airline lost millions of dollars daily (Sharkey 2004). Reductions in flights averaged 20 percent, and the average number of layoffs was 16 percent across the industry.
Not all airlines handled this crisis the same way and an analysis of the 10 airline companies' response to the tragedy uncovered an important ...