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Airlines Face Uncertain Future

Stocks slump in market sell-off

And other airlines are already following suit. Yesterday, US Airways said it plans to fire 11,000 employees, or 24 percent of its workforce. A company official at American Airlines, the nation’s largest airline, said the carrier will announce layoffs later this week.

“While it’s painful to have to reduce staff,” Messing said, “it’s really neccessary to ensure the long-term vitality of the company.”

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Carriers are also scaling back their schedules to avoid bankruptcy. American, Continental, Delta, Northwest, and United have cut their schedules by 20 percent.

“We do not believe that every airline’s survival is guaranteed under any circumstances,” said Jim Higgins, an analyst at Credit Suisse First Boston in New York.

Higgins predicted that the industry will lose at least $5 billion dollars this year.

In response, airlines are trying to “restore integrity to the system that was disabled” by last Tuesday’s terrorist attacks, pressing for support in Washington, and continuing to serve custumors, Messing said.

Airline executives are lobbying for a $20 billion assistance package from the federal government that includes direct aid, low-interest loans, tax relief and a takeover of insurance liability from claims related to the terrorist acts, said John Heimlich, director of economic research for the Air Transport Association.

Transportation Secretary Norman Mineta and Bush economic adviser Larry Lindsey will meet with airline executives today. The meeting comes after President Bush ordered aides to develop a package of proposals to help the airline industry yesterday.

—Staff writer Catherine E. Shoichet can be reached at shoichet@fas.harvard.edu.

—Material from the Associated Press was used in the compilation of this article.

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