Travel, automotive industries adjust to slumping economy

Robyn Repya

The Sept. 11 terrorist attacks left the United States with an aching heart and a bruised economy from which many industries are trying to recover.

The airline and travel industries, hit hardest by the economic downturn, said there is little they can do except encourage people to fly. One car manufacturer is offering no-interest financing to stimulate spending.

But for the industries hit hardest by the attack, bouncing back won’t be easy.

Doug Killian, a Northwest Airlines spokesman, said NWA lost $300 million when planes were grounded for four days following the attack.

He said people aren’t flying due to public fears or because it’s just not the right time to travel.

“We’re still concentrating on gaining the public’s trust in flying,” Killian said.

Desperately needing to boost sales, the airline has begun offering incentives. NWA has matched deals launched by Southwest Airlines and is still promoting its own specials, Killian said.

“Wednesday at midnight we have our cyber-savers fare … 70 percent discounts round-trip,” he said.

Northwest, like many others in the airline industry, is anxious to restabilize.

“Our future depends on the industry recovering and the economy improving,” Killian said.

Travel agencies are also trying to stay afloat after the attack.

“We’re encouraging people to go along with business as usual,” said Tim Frank, Council Travel’s Minnesota branch manager.

Travel has been on a slow rise since the dropoff immediately following the attack, Frank said.

Michael Burns, Manhattan-based Council Travel’s national director of marketing, said prices will probably be adjusted.

“We expect that prices will go down to attract people to fly,” he said.

Burns said all areas of business have been affected by the attack.

“Restaurants in Manhattan are empty,” Burns said. “There’s sales in all retail stores.”

Steve Fowler, truck sales manager at Jim Lupient’s Auto Mall in Golden Valley, said sales have remained pretty normal, and they want to keep them that way.

Fowler said General Motors has taken preventative measures in a program called “Keep America Rolling” to ensure sales won’t slide and jeopardize plant jobs.

The program offers no-interest financing for five years on cars purchased before Halloween.

According to the GM Web site, the program is intended to help the U.S. economy sustain its momentum and return to normalcy.

An economic rebound depends on consumer confidence and spending, which has been reduced by the stock market’s recent drop, said John Boyd, University finance professor.

“(The attack) set off one of the worst weeks in stock market history,” Boyd said.

There has been a massive increase in uncertainty and unpredictability, and financial markets don’t like uncertainty, Boyd said.

University economics professor V.V. Chari said, however, that the attack will have only a short-term affect on the U.S. economy.

Chari said a fair assessment of the economy would be to expect an upturn in about a year. Crediting his optimism to U.S. economic history, he said the economy has had a very stable rate of growth for 120 years.

Said Chari, “We’re extremely lucky to be living here.”

 

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