$5 billion government assurance nearly matches $5.4 billion airline woes

The $5 billion allocated by the federal government to compensate U.S. airlines for lost revenue after the Sept. 11, 2001, terrorist attacks was amazingly close to the actual financial setbacks the airlines sustained, according to two researchers in the College of Business at Embry-Riddle Aeronautical University. In their study, Dr. Notis Pagiavlas and Dr. Vitaly Guzhva separated the effect of the attack from other economic forces that impacted the airline industry. They determined that the net effect of the attack was approximately $5.4 billion, caused mainly by the immediate grounding of flights and reduced schedules.