By Published on .

On nov. 12, another episode was added to the unprecedented recent events for American Airlines and the industry when American Flight 587 crashed into a neighborhood near New York's John F. Kennedy International Airport. One image in the news coverage was dominant: the silver tail of the plane with American's logo being lifted from the water.

The tragic morning left a shaken airline to restart what it had only just begun: rebuilding customer trust. That had started haltingly following Sept. 11, when a first round of enduring images of two American planes-and two from United-involved in horrifying terrorist acts.

Slowly, between Sept. 11 and Nov. 12, American and the industry appeared to make a comeback. A Gallup poll showed the number of Americans concerned that they or a family member would fall victim to airplane terrorism had dropped to 40%, from 58% on Sept. 11. American launched a feel-good, sentimental ad campaign from Interpublic Group of Cos.' Temerlin McClain, Irving, Texas, focused on a fare sale and on bringing family members together as the holidays approached.

But after only 20 days, the ad campaign was off the air Nov. 12-along with comeback campaigns from competitors. The second serious blow to American's image comes as the critical holiday period begins this week. An American spokesman said bookings were down the week after the Nov. 12 crash, but declined to release figures, adding he did not expect it to have a "major impact." Goldman Sachs figures show American had an average load level of 71.6% through September of this year; that fell to 59.6% for September and October.

Millions of dollars in losses are predicted due to emptier planes, lower promotional fares and higher insurance premiums associated with the tragedies. Deutsche Bank did not lower its fourth-quarter revenue projections for American after Nov. 12, but still predicted a 23% drop in revenue to $3.7 billion.

Just 11 weeks ago on Sept. 10, American had much to feel good about. Its "More room in coach" campaign, following removal of seat rows, gave it a new identity despite a slowing economy. And the carrier, responding to competitor United Airlines' proposed merger with US Airways, overtook ailing TWA. After the government unexpectedly nixed the United deal, American stood as the world's largest airline, with the most planes-almost 900-and in the amount of miles passengers fly on those planes fly on an annual basis. Last year, American and United were very close in terms of operating revenues, with American's corporate parent, AMR, posting $19.7 billion and United $19.3 billion.

Then came the two infamous days. On Nov. 12, American reacted swiftly. Chairman-CEO Don Carty flew to New York, comforting e-mails were blitzed to loyal customers and passengers were allowed to re-book upcoming flights with no penalty.

Much of the damage to American's image will be entwined with what investigators determine caused the Nov. 12 crash. Preliminary findings indicate American's Flight 587 got caught in the turbulence of a plane that took off before it.

Experts agree consumers don't blame the airline per se for the Sept. 11 terrorist acts. But the airline industry's record of recovery following terrorism and crashes has some notable failures: Pan Am never seemed to recover from the 1988 hijacking of flight 103, and ValuJet faltered after a 1996 Florida crash.

But the American scenario looks to be different than the plights of the aging Pan Am and fledgling ValuJet.

"Ninety percent of the population could tell you which airlines were involved on Sept. 11 ... but I don't believe the airlines involved are being held responsible for what happened," said Ron Kuhlmann, an industry analyst at management consulting firm Roberts, Roach & Associates. "Whatever uneasiness there is can be spread across the board because I think there is a fairly clear understanding that it could have been any airline."

American executives, despite the unfortunate timing of the events, believe the company will prevail. "Our feeling is the American Airlines name stands for quality and dependability, service, reach and breadth of network," said American spokesman Al Becker.

American's strong balance sheet and hub system, and the industry's first frequent flyer program, may help it weather this fall's events. "They have a huge constituency with frequent flyer miles," Mr. Kuhlmann said. "If nothing else, once you've got a million miles in some program you're going to stick to that carrier."

Most Popular
In this article: