I think IFR has got it about right, the industry at present is in deep crisis, but it can and will recover. It is a matter of simple economics using the firing and hiring of airline staff and disposal of aging assets as a quick, yet easily recoverable financial buffer.
Some of the larger operators were showing signs of strain prior to these attrocities, their older aircraft proving expensive to operate, and causing them to re-examine their future strategies which until now were to modernise and expand their capabilities. The huge interest in the A380 ably demonstrated that. Until 10 days ago the big operators were thinking expansion and had done the market research to confirm this, despite a small forecast profit shortfall. So, why should everything become so black, so quickly, post the WTC terrorism? Money! Shares are in free fall, insurance is rocketing, and consumer confidence (bums on seats)is understandably low. What shrewd accountant would not take the opportunity to slash costs by removing aging aircraft, cutting routes and laying off staff, making swingeing cuts to save money whilst the industry is in chaos. Accountants would call it prudent. What has he got to lose, less routes means more bums on seats per aircraft, seats can be sold at premium prices and all done with a much reduced wages bill. Better still, over estimate the cuts required to maximise savings. The only people to be affected are those poor unfortunates who are laid off and the consumer.
What happens when consumer confidence returns? And it will, when recent events begin to recede in peoples minds, foreign holidays, business travel and the sheer convenience of air travel, which we have all enjoyed and taken for granted, will cause consumer demand to return to a more sensible level. There will be a steady re-employing of many of those thousands laid off to cover schedule re-expansion. Natural wastage within that group and those still in the industry, will still create the demand for new staff to continue to be trained.
The financial markets will dictate the speed of recovery, more than consumer confidence. The stupidity of the knee jerk reaction displayed by those institutions at the restart of Wall St trading cannot continue. The world has not stopped, businesses will continue to trade, and if for no other reason than defiance the economics of our vital industry will recover. It is too big, and too crucial to modern life not to.
Now for WW3!!!!