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America's New War: Travel Industry Impact

Aired September 27, 2001 - 06:44   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL LIN, CNN ANCHOR: We're taking a look at some of the economic effects of the terrorist attacks. They're just beginning to be felt. We're taking a look at the travel industry, the tourism industry. It is so far looking like a secondary victim.

The hotel industry reports a 30 to 40 percent drop in occupancy. And airlines say they are operating at about 80 percent capacity. Flights are running about half full, and for thousands of airline workers, that means layoffs.

CNN's Brian Palmer reports.

(BEGIN VIDEOTAPE)

BRIAN PALMER, CNN CORRESPONDENT (voice-over): Airlines say the financial damage caused by September 11th and the national fear of flying that resulted is in the billions. The major passenger carriers may start seeing cash as early as next week from the $15 billion bailout approved by Congress. But that's little consolation to workers being laid off in the wake of the crisis: about 100,000 of them.

UNIDENTIFIED MALE: I've gotten a double-whammy today. I have not only still as of today, we still have my cousin missing, I'm also losing my job.

UNIDENTIFIED FEMALE: It's devastating. It's very painful for me to lose my job. I love my job here.

PALMER: Ramp service worker Perry Esposito has worked at TWA for 16 years, since he was 18.

PERRY ESPOSITO: I see myself now starting over again and maybe even a different trade, maybe even a different industry, starting from the bottom up again.

PALMER: His fiance also works for an airline.

ESPOSITO: She'll walk away with nothing, not even severance pay, no medical, dental.

PALMER: Industry representatives say layoffs are a necessary emergency measure. But many airlines were struggling financially before the attacks. DAVID TREITEL, AVIATION CONSULTANT: This shock still exacerbated what was already an adverse environment and created really a disaster.

PALMER: The airlines hope the bailout will prevent bankruptcy and buy them time to win back frightened customers. More customers means fewer layoffs.

TREITEL: The bailout helps keep the capacity flying to a greater level than it would without the bailout. That's the benefit that the average worker gets.

PALMER: The average worker who still has a job. The bailout doesn't contain any financial help for those getting laid off.

(on camera): A bill introduced in Congress would set aside close to $4 billion to extend unemployment benefits and fund retraining for these workers.

(voice-over): And some companies, among them U.S. Airways and Continental, have agreed to pay severance. Northwest Airlines and American say they will not. TWA, a subsidiary of American, has yet to make a decision, leaving Perry Esposito on stand-by wondering about his future.

Brian Palmer, CNN, New York.

(END VIDEOTAPE)

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