Modeling The Impact Of September 11
Having described the baseline model, we now turn our attention to modeling the impact of September 11. As a starting point, we first take a non-parametric approach by fitting 27 dummy variablesone for each month on and after September 2001onto the baseline model we introduced in the previous section. For this exercise, we also included the seasonality dummy variables but excluded the Iraq War and SARS dummy variables. plots the coefficient estimates of those 27 monthly dummy variables across time. Each data point represents the gap between the actual log of the RPMs/yield observation and what the baseline model predicts, after controlling for economic fluctuations and other demand and supply factors. demonstrates that after the sharp drop in September 2001, there was an initial recovery phase. By mid 2002, however, the recovery began to taper off, and through November 2003, the gap for both RPMs and yield continues to hover well below zero, without any apparent tendency of closing.
Dummy variable estimates.
Model 1: Define T911 as the number of months since September 2001 plus one . In Model 1, we simply include the inverse of 2 as an additional regressor. The implicit assumption is that the transitory shock will decay at a rate equal to the squared reciprocal of time.Although this specification is somewhat ad hoc, it has the advantage of being simple to estimate.
A Changing Passenger Traffic
Over the next 10 years, a greater percentage of travelers stepping onboard aircraft will have had little to no memories of 9/11 other than what was taught in schools. An entire generation of travelers is pushing their bags through a security screener, taking their shoes off, and walking through full-body scanners without knowing the impact of that fateful day.
I was too young to remember everything from that day. My parents worked for the US government in Washington D.C. In the years before the rise of smartphones with location-tracking services, my grandmother and I were at our apartment, unclear of what was happening, and my parents scrambling to get home.
The first flight of my life was in 2002 after the world had changed. It was a Boeing 747 operated by British Airways to London-Heathrow. I never got an opportunity to fly in a world where security was not as strict as it became in the post-9/11 atmosphere. Many others younger than me, those same ones who will start to occupy more seats flown previously by business travelers, those same ones who will start families and fly down to Orlando to visit Disney, and those same ones who will be the next frequent fliers.
Every year, 9/11 serves as a reminder of what makes this industry great, and that is its ability to bring people together. Together in the name of safety. Together in the name of travel. Together in the magic of flight. This is a lesson that should never be forgotten and must continue to be passed down.
Limitations Of The Current Analysis
While our analysis provides strong evidence of a negative structural change in airline demand following September 11, we should emphasize that our analysis has some limitations. To begin with, at the time of our analysis, only 27 monthly observations since September 2001 are available, which limits the degrees of freedom for our analysis concerning the post-September 11 period. While the U.S. airline industry has typically recovered from other negative shocks considerably faster than 27 months, a catastrophic event such as September 11 could obviously require a longer recovery period. If this is the case, we are still observing the recovery. Based on the data, one cannot rule out the possibility that we are still on the recovery trajectory from September 11, especially when events such as the Iraq War and the SARS epidemic have put additional downward pressure on the demand for air travel. Consequently, it will be useful to repeat the current analysis as additional observations become available.
Moreover, it is possible that the industry adapts to the post-September 11 environment in some unexpected way. For example, new technological innovations in security screening might eliminate some of the waiting time at airports, thus, reducing the hassle factor and making air travel more convenient. Likewise, new forms of passenger screening may become widespread and improve passengers sense of security.
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Air Travel Comes To A Halt
In the days after 9/11, commercial flights came to a halt. The world was asking one question: is air travel safe? While the world mourned, airlines saw a near drop-off in bookings that led to a rough financial crisis for carriers lasting a few years. Many lost their jobs in the aftermath.
There had never been a crisis like 9/11 in the airline industry. While there were hijackings and terrorist attacks on planes, the sheer size of the attacks on 9/11 had never been seen before. Airlines had no playbook for coming out of this crisis.
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That morning, the phone calls came in, first from Parker’s sister-in-law, who mentioned a crash, and then from the airline’s operations control center, which said the Federal Aviation Administration had grounded all commercial flights. As he quickly drove the half dozen miles to work, Parker said, “my first concern was making sure all our people were safe.” That turned out to be the case.
Another concern was not so easily resolved. America West, the ninth-largest airline, was about to run out of money. It had been negotiating with GE Capital and
Airbus
for a financing package term sheets had been signed, but not definitive documents. The events of Sept. 11 dramatically reduced air travel, which constituted a “material change in events” leading GE Capital and Airbus to pull out of the financing deal.
After a three-day shutdown, flights resume, but travel did not. “We were flying 10% loads,” Parker said. “I would go to the airport and walk into the crew rooms. Our employers were there. They put on their uniforms and went to work. They weren’t afraid.” Unfortunately, the public was.
From a Phoenix conference room, Parker joined in conference calls with top executives from other airlines and government officials, who discussed how to save the industry. The strangest part, Parker said, was that no airplanes flew by the windows, which looked out on the flight path for Phoenix Sky Harbor Airport. “It was a weird three days,” he said. “You didn’t see any airplanes all day.”
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How Did The September 11 Attacks Change America
The attacks had a profound and lasting impact on the country, especially regarding its foreign and domestic policies. U.S. Pres. George W. Bush declared a global war on terrorism, and lengthy wars in Afghanistan and Iraq followed. Meanwhile, security measures within the United States were tightened considerably, especially at airports. To help facilitate the domestic response, Congress quickly passed the controversial USA PATRIOT Act, which significantly expanded the search and surveillance powers of federal law-enforcement and intelligence agencies. Additionally, a cabinet-level Department of Homeland Security was created.
, also called 9/11 attacks, series of airlinehijackings and suicide attacks committed in 2001 by 19 militants associated with the Islamic extremist group al-Qaeda against targets in the United States, the deadliest terrorist attacks on American soil in U.S. history. The attacks against New York City and Washington, D.C., caused extensive death and destruction and triggered an enormous U.S. effort to combat terrorism. Some 2,750 people were killed in New York, 184 at the Pentagon, and 40 in Pennsylvania all 19 terrorists died . Police and fire departments in New York were especially hard-hit: hundreds had rushed to the scene of the attacks, and more than 400 police officers and firefighters were killed.
Afghanistan Commercial Flights Resume As Un Accuses Taliban Of Harassment
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The flight marked an important step in the Taliban’s efforts to create a functioning state after they seized power last month, although there were growing reports of violence against women, foreigners and journalists at the hands of the Islamists.
U.N. Special Envoy on Afghanistan Deborah Lyons told the Security Council that nongovernmental organisations supporting women were being targeted, women’s freedoms had been restricted and the United Nations’ Afghan staff were being harassed and intimidated.
“The U.N. cannot conduct its work – work that is so essential to the Afghan people – if its personnel are subjected to intimidation, fear for their lives, and cannot move freely,” Lyons told the Security Council.
An internal U.N. security document seen by Reuters on Aug. 25 described dozens of incidents including veiled threats, the looting of U.N. offices and physical abuse of staff since Aug. 10, five days before the Taliban swept to power.
The harassment of U.N staff came as the country was in danger of “a total breakdown of the economy and social order” without an infusion of money, Lyons said.
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Reflecting On September 11th 20 Years Later
By: Christopher BrowneNational Air and Space Museum
National Air and Space Museum acting director Chris Browne was Airport Manager of Ronald Reagan Washington National Airport on September 11, 2001. Twenty years later, he reflects on his experience on 9/11.
Most of us can remember where we were when we heard that Flight 11 flew into the side of North Tower of the World Trade Center in New York. People on the East Coast were just arriving at work, early risers on the West Coast were just starting their day, parents were dropping their kids off at school. In the minutes following the first attack, confusion reigned.
Since the weather in New York was just as clear and sunny as it was in DC, I thought that the airliners collision with a skyscraper in the heart of New York City could not have been anything other than intentional.
In the immediate aftermath of the attacks, I had a job to do, so I did not have time to process what was happening on an emotional level. In my capacity as the Airport Manager at Ronald Reagan Washington National Airport on that fateful day, my more immediate efforts focused on protecting travelers, planes, and structures from further harm and damage. After Flight 77 crashed into the Pentagon, just three miles from Reagan National, embers falling onto the airport from the smoke plume rising above the Pentagon served as an ever-present reminder that the risk was very real.
What Were The September 11 Attacks
The September 11 attacks were a series of airline hijackings and suicide attacks committed in 2001 by 19 terrorists associated with the Islamic extremist group al-Qaeda. It was the deadliest terrorist attack on U.S. soil nearly 3,000 people were killed. The attacks involved the hijacking of four planes, three of which were used to strike significant U.S. sites. American Airlines flight 11 and United Airlines flight 175 were flown into the World Trade Centers north and south towers, respectively, and American Airlines flight 77 hit the Pentagon. United Airlines flight 93 crashed in a field near Shanksville, Pennsylvania, after passengers attempted to overpower the hijackers. The plane was believed to be headed to the U.S. Capitol building in Washington, D.C.
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The Data And The Model
Data for U.S. airline industry demand comes from the Air Transport Association’s monthly database of passenger traffic and represents all revenue passengers carried by ATA member carriers.In light of the dramatic change in the regulatory environment following deregulation, our analysis focuses on the post-deregulatory era.Moreover, within the post-deregulatory era, we focus our analysis on domestic travel from January 1986 until November 2003, due to data availability for some of our variables.
Our primary measure of airline demand is domestic RPMs. Although the number of O& D passengers is another possible measure, we chose RPMs as our proxy for demand since the average trip length of passengers has been steadily increasing over time.Our measure of the airline prices is the average domestic monthly passenger yield as reported by the ATA.Our baseline model is a reduced form estimation of the natural log of quantity and price .
Baseline model:
Xt represents a vector of exogenous variables, including both demand and supply shifters. Dt is a vector of dummy variables, accounting for seasonality and various events that may have impacted the market for passenger airline service. Finally, t and t are mean-zero error terms. We use OLS estimation and account for the auto-correlated nature of the errors by using NeweyWest standard error estimates. The descriptions of our independent variables, in addition to further details of our modelling approach, are detailed below.
/11 Anniversary And Memorial
On December 18, 2001, Congress approved naming September 11 Patriot Day to commemorate the anniversary of the 9/11 attacks. In 2009, Congress named September 11 a National Day of Service and Remembrance.
The first memorials to September 11 came in the immediate wake of the attacks, with candlelight vigils and flower tributes at U.S. embassies around the world. In Great Britain, Queen Elizabeth sang the American national anthem during the changing of the guard at Buckingham Palace. Rio de Janeiro put up billboards showing the citys Christ the Redeemer statue embracing the New York City skyline.
For the first anniversary of the attacks in New York City in 2002, two bright columns of light were shot up into the sky from where the Twin Towers once stood. The Tribute in Light then became an annual installation run by the Municipal Art Society of New York. On clear nights, the beams are visible from over 60 miles away.
A World Trade Center Site Memorial Competition was held to select an appropriate permanent memorial to the victims of 9/11. The winning design by Michael Arad, Reflecting Absence, now sits outside the museum in an eight-acre park. It consists of two reflecting pools with waterfalls rushing down where the Twin Towers once rose into the sky.
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Economic Impact Of 9/11
The 9/11 attacks had an immediate negative effect on the U.S. economy. Many Wall Street institutions, including the New York Stock Exchange, were evacuated during the attacks. On the first day of trading after the attacks, the market fell 7.1 percent, or 684 points. New York Citys economy alone lost 143,000 jobs a month and $2.8 billion wages in the first three months. The heaviest losses were in finance and air transportation, which accounted for 60 percent of lost jobs. The estimated cost of the World Trade Center damage is $60 billion. The cost to clean the debris at Ground Zero was $750 million.
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Grievous Losses: The Travel Industry Barely Survived 9/11
WASHINGTON, DC – SEPTEMBER 01: A flight attendant call button from United Flight 93 found at the … crash site in Shanksville, Pennsylvania is displayed alongside other artifacts from the September 11, 2001 attacks as part of an exhibit at the Smithsonian National Museum of American History September 1, 2011 in Washington, DC. For nine days leading up to the 10th anniversary of the terrorist attacks, the Museum will display more than 50 objects from the World Trade Center, Pentagon and Shanksville, Pennsylvania, in an exhibit titled, “September 11: Remembrance and Reflection.”
Today marks eighteen years since the terrorist attacks on the United States now known as 9/11. While anniversary stories are an often-dreaded part of journalism the suffering that literally came out of the sky on that September day will remain cause for reflection for years to come.
The travel industry was brought to its knees by the attacks. Four state-of-the-art airliners, two Boeing 757s and two Boeing 767s,were hijacked by the terrorists, who reportedly chose transcontinental flights laden with fuel to maximize the impact of the suicide attacks.
American Airlines Flight 11, a 767 scheduled to fly from Boston Logan to Los Angeles International was instead crashed into the North Tower of the World Trade Center. United Airlines Flight 175, another Boeing 767 also scheduled to fly from BOS to LAX, was crashed into the South Tower.
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Flight Attendants’ Changed Profession
The 9/11 attacks had a profound impact on flight crews. Eight pilots and 25 flight attendants were working the four flights that were hijacked.
Ken Diaz, United chapter president of the Association of Flight Attendants-CWA labor union remembers checking in for a flight he was working to Chicago from Newark Liberty International Airport the morning of 9/11. Some of his friends were crew members on Flight 93, which crashed near Shanksville, Pa.
Sara Nelson, international president of the union, which represents some 50,000 cabin crew members at more than a dozen airlines, said she and a colleague, when they returned to flying later in September 2001, placed their hands around their necks during takeoff so that potential hijackers wouldn’t slit their throats “and they would get our hands instead.”
More than 40% of United’s flight attendants were hired after 9/11, as were more than a third of American’s. But Nelson said flight attendant training is still informed by those events.
“By the time they get their wings it’s fundamental to the training they’ve had,” she said, who started as a flight attendant at United in 1996.
Diaz said there are new procedures, including notifications to crews for when a pilot exits the flight deck to use the lavatory. Flight attendants are also more dispersed throughout the cabin during boarding.
Asked if there is ever a time when she doesn’t think about 9/11 when she starts working a flight, Nelson replied: “Never.”