Financial Management: Assessment of the Airline Industry's Estimated LossesArising from the Events of September 11

摘要

In the wake of the September 11, 2001, terrorist attacks on the United States,the airline industry has estimated significant losses resulting from the temporary shutdown of the nation's airspace and the sever drop in passenger traffic since the attacks. In response, on September 22, 2001, the President signed the Air Transportation Safety and System Stabilization Act which provides $5 billion in emergency assistance to compensate the nation's air carriers for these losses. Specifically, the law stipulates that an amount equal to $5 billion will be made available to compensate air carriers for direct losses incurred beginning September 11 as a result of any federal ground stop order issued by the Secretary of Transportation, and incremental losses incurred beginning September 11 through December 31, 2001, as a direct result of terrorist attacks. We performed an analysis of the data and methodologies used by the airline industry to estimate the losses through December 31, 2001, stemming from the terrorist attacks to determined whether there is a reasonable basis for the estimate, and assess the overall reasonableness of the $5 billion compensation package. This letter summarizes the information we provided during our September 28, 2001, briefing pursuant to these requests.