The financial crisis claimed its biggest victim to date on 9 December 2002, when United Air Lines (UAL), the second largest airline in the US, filed for bankruptcy protection from its creditors, under Chapter 11 of the US Bankruptcy Code, with debts of over $28 billion and a general belief that it faced a long and tough fight. The airline told a US bankruptcy court Judge in late December 2002, that it expected to lose some $3. ... In addition, the biggest airline in the world, American Airlines, was still struggling hard to avoid its own descent into bankruptcy. ... There seems to be no likelihood of those requirements fading, or of the airline industry itself ever being able to pay its own way in such matters. ... 2% over the previous year, which the AEA said indicated how this localised conflict can affect airline traffic on a global scale. ... At present, it is impossible to measure how severe any resulting airline restructuring may be, but the fact that there will be some failures is considered to be inevitable.
The war in Iraq has seriously and temporarily, dealt a heavy blow to international airline traffic. ... The result was that for 2001/02 as a whole, the final losses on IATA airline services are estimated at some $25 billion. ... But while US Airways was coming out of bankruptcy, Air Canada, Canadas flag airline went into protection from creditors under the Canadian Companies Creditors Arrangements Act, broadly equivalent to US Chapter 11 arrangements. ...
While the low-cost situation will continue to make life difficult for the main flag airlines on both sides of the Atlantic, in that it seems likely to result in significant long-term changes in the local regional patterns of airline operations, it is a heaven-sent boom for passengers. ... This has already led to a new Airline Passenger Service Commitment by the European airlines, aimed at improving the overall efficiency with which complaints are handled, which became effective in February 2002. ... In addition, the war with Iraq will have damaged the airline industry further and retarded any possible recovery. ... These entrenched labour attitudes in the US have in the past been largely responsible for soaring airline costs, thereby helping to accelerate, if not directly leading to, the demise of many US airlines (including Eastern Airlines in January, 1991, Pan American in December, 1991, Trans World which was absorbed into American Airlines in 2001, and Braniff International in July 1992, followed by National, liquidated in November, 2002, and Vanguard in October, 2002). ...
IATA itself says that it is clearly evident that structural changes (ie within the global airline industry) will be needed to facilitate continued growth and future stability. ...
The new climate of greater emphasis on safety should not be allowed to detract from the equally strong need for improving the quality of passenger service, especially in the lower-fare cabins, which had been becoming more significant in all airline activities prior to 11 September 2001. ...
The European Airline Passenger Service Commitment
This formal commitment, finally emerged in 2002 after a long debate among airlines, governments and regulatory bodies.
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