The current crisis cannot be blamed solely on the events of Sept. 11, 2001. Even before the world witnessed the disastrous hijacking of four commercial airliners, the airline industry was close to financial ruin. The terrorist attack, elimination of flights and the need for major investments in airport security have pushed the airlines into nothing short of a fight for survival. The economic aftershocks of the Sept. 11 attack is widespread; in addition to the airline industry, tourism, insurance and shipping are also sure to suffer substantial losses.

Passenger volumes have dropped drastically among concerns about security. Airlines have already undertaken aggressive action to reduce capacity and

This time, the outcome may be grimmer, airline executives and experts warn. The airlines lost $18 billion over the past two years and expect to lose another $5 billion this year even without a war. Two carriers – US Airways and United – have filed for bankruptcy protection. American Airlines, the world's largest, has hired bankruptcy attorneys. American's flight attendants union said that the carrier's bankruptcy filing may come soon (International Air). Delta said it expects negative cash flow from operations in the current quarter because of war concerns (International Air).

· The third point, which amounts to an action item both for the government and the airlines, is that the government must enable appropriate industry restructuring to take place, including steps by bankrupt carriers, as well as possible mergers, alliances, or asset sales among the various carriers in the industry. "Given the current industry circumstances, all governmental assumptions about appropriate industry stimulus need to be re-examined," Mullin said.

Already, the number of flights in a month at Reagan National Airport has fallen 15 percent, to 13,583, in September 2002, from 16,006 in September 1997, according to the latest figures available from the Bureau of Transportation Statistics. At Dulles International Airport, the decline was 4 percent (International Air).

· let airlines merge or do codeshare alliances to cut costs more

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