International aviation industry reacts to U.S. terrorist attacks

 - October 9, 2007, 12:18 PM

Still unable to comprehend the monstrous scale of the September 11 terrorist assault on the U.S., the international air transport industry got a swift taste of the disruption and chronic uncertainty that undoubtedly lie ahead. Business aviation–which some are now saying will become increasingly important as companies look for a safe and convenient alternative to airline travel–faced serious restrictions in the week following the attack.

All flights to the U.S. were stopped until late on September 13, when some flights by U.S. carriers resumed. The first commercial services by non-U.S. airlines resumed to and from the U.S. on September 14, but only from countries that had met the FAA’s new 11-point security code covering check-in and boarding procedures.

At press time, only N-registered aircraft were being permitted to fly into U.S. airspace, as authorities there struggled to restore commercial airline service. However, even these aircraft were permitted to fly only from certain approved countries, such as the UK, Canada and France. No technical stops were being permitted en route to the U.S.

Many foreign corporate operators resorted to flying to Canada, from where their passengers attempted to catch scheduled services to U.S. airports or even to proceed by ground transportation. The ban on foreign business aircraft hit several U.S. corporations with aircraft registered offshore in tax-friendly locations such as Bermuda and the Cayman Islands.

Increased Security
Around the globe, airport security was immediately increased to the highest levels. In countries such as the UK, France and Russia, where there has been an almost constant terrorist threat in recent years, this is a fairly commonplace step but many in the industry have now accepted that the inconvenience of tighter controls will be permanent for the foreseeable future.

In recent years, airports such as London Heathrow, Barcelona in Spain and Colombo in Sri Lanka have been subjected to audacious terrorist attacks. For instance, in 1997, one of the runways at Heathrow was hit by mortar shells fired by Irish Republican terrorists from the parking lot of a nearby hotel.

Mindful of the fact that its especially close alliance with the U.S. could make the country a prime terrorist target, the UK government summarily banned all overflying of central London until midnight on September 15. The downtown London City Airport was completely closed until September 14. The restriction increased the burden on air traffic controllers managing takeoffs and approaches at all London-area airports, causing significant delays to intra-European flights.

All business aircraft operated under non-commercial rules (i.e., the equivalent of
Part 91) were completely grounded for 48 hr throughout the UK until September 13. Executive charter operators and corporate flight departments holding commercial air operators certificates (AOCs) were permitted to fly.

The UK’s General Aviation Manufacturers and Traders Association (GAMTA) lobbied hard to have the restriction on corporate operators lifted, even if the rest of general aviation had to remain grounded. Several in the industry argued that it was illogical to ground privately owned and operated business aircraft, while allowing charter jets (which in theory could be hired and then hijacked by terrorists) to fly. Generally, other European states did not impose such broad-brush restrictions on private flying.

Theresa Wooll, manager of Universal Weather & Aviation’s handling and flight-planning operation at London Stansted Airport, told AIN that while other customers were prevented from either arriving or departing, the facility had been able to receive an incoming Sabreliner on a charter flight from the Middle East. FBO staff around Europe battled to secure hotel rooms for stranded corporate pilots, competing with companies that needed accommodations for many thousands of visiting executives.

Caught in the Mess
One U.S. executive temporarily trapped in Europe by the security crisis was Executive Jet senior vice president of marketing Kevin Russell, who had traveled to Dassault’s Bordeaux, France headquarters to take delivery of a Falcon 2000 for the company’s NetJets fractional-ownership program. The French manufacturer held a ceremony to mark the 1,500th Falcon delivery on the morning of September 11, just a few hours before the attack on the U.S. East Coast.

Numerous business aircraft flying across the Atlantic before the initial attack on New York’s World Trade Center were forced either to return to Europe or continue to Canada. Immediately after U.S. airspace was closed there was reportedly confusion as to whether Canadian airspace had been kept open. According to the UK’s National Air Traffic Services, several aircraft close to their equal time point (“point of no return”) declared fuel emergencies. Controllers scrambled to divert some flights to Canada or the Caribbean (around 170), while almost another 100 turned back to Europe (not necessarily to their departure airports).

In interviews with AIN, many in the industry were loath to discuss security issues in detail or to say anything that might be construed as insensitive criticism of U.S. authorities. However, privately there was some disquiet that the FAA’s initial exclusion of foreign aircraft was ill-founded in view of the fact that, since the 1989 bombing of Pan Am’s Flight 103 over Lockerbie, Scotland, most European countries have exercised significantly higher levels of airport security. In Europe, security procedures for U.S. domestic flights have long been regarded as inadequate.

Economic Ramifications
Before the reopening of U.S. financial markets, analysts in Europe were unanimous in their conviction that the already precarious worldwide economy is now without doubt teetering on the brink of recession. The air-transport industry is widely expected to be one of the hardest-hit sectors, with many observers predicting dips in global air traffic every bit as serious as those suffered by airlines during and after the 1991 Gulf War. In the first three days of trading on the London Stock Exchange following the September 11 attack, British Airways stock fell by 16 percent to 165 pence–its lowest level since the Gulf War.

Stock in aircraft manufacturers and engine makers also suffered significant declines in London trading, founded on concern over anticipated cancellation of airliner orders. Some analysts predicted that groundbreaking new programs, such as Airbus’ A380 super-large airliner and Boeing’s Sonic Cruiser, will likely be postponed.

Transport ministers of the 15-nation European Union (EU) quickly called for talks on further strengthening of airline and airport security measures. The early consensus was that carriers would have to start following the hardline tactics employed by Israeli flag carrier El Al. These include the use of plain-clothed armed security personnel on all flights and reinforced cockpit doors that carry a significant weight penalty, requiring the removal of some airline seats. Associated hikes in airline ticket prices, combined with worldwide security concerns, inconvenient measures such as minimum check-in periods of four hours and restrictions on cabin baggage, are widely expected to cause a slump in the hitherto burgeoning levels of traffic growth.

Commenting privately for fear of seeming to capitalize on the terrorist attacks, several business aviation executives predicted that adverse conditions in the airline industry could well boost the appeal of corporate aircraft. The rationale for this is easy to see, but with revenues widely expected to fall it could equally be supposed that companies may have a hard time coming up with the cash required to start using business aircraft.

Predictably, prices on the futures market for oil increased by 10 to 15 percent in the week following the attack. With the prospect of war mounting, it seemed inevitable that pledges by the Organization of Petroleum Exporting Countries (OPEC) to preserve rates of output would not prevent significant hikes in jet-A pump prices within the next few weeks.

Similarly, with the insurance industry facing catastrophic losses that have been conservatively projected at a minimum of $20 billion, brokers were already warning of marked increases in premiums. Some also suggested that U.S. insurers will likely follow the European example of refusing to cover acts of terrorism.  
 
On September 18 the European Aeronautic Defence and Space Company (EADS) announced it is making a $2 million donation to support victims of the terrorist attacks. The European group includes the Airbus and Eurocopter companies. Its joint CEOs, Rainer Hertrich and Philippe Camus, commented: “In this time of unprecedented sorrow and challenge to values that we share and cherish, we want to show our solidarity with all those who have suffered and are still suffering owing to this cruel and ruthless attack.”