Pilotchris From United States of America, joined Mar 2004, 2 posts, RR: 0 Posted (11 years 7 months ago) and read 2692 times:
Good day, folks. I’m about to start my master’s thesis on the correlation between major airline accidents and post-accident market share and profitability. Specifically, I’m researching airlines that have suffered major accidents to see if there is a link between the bad press and public uncertainty, and the eventual demise of the carrier. A good example would be ValuJet’s inability to recover following the crash of Flight 592.
If anyone would like to share their thoughts on this subject, or if you can provide other examples of airlines that’ve collapsed in the wake of a major accident, I would be extraordinarily grateful.
MSYtristar From , joined Dec 1969, posts, RR:
Reply 1, posted (11 years 6 months 4 weeks 1 day 23 hours ago) and read 2636 times:
A classic example:
Pan American World Airways was beginning to turn things around in late 1987/early 1988. Its flagship 747 fleet was undergoing a massive refurbishment program, and bookings were up all across the route system. There was talk of a small profit by the end of 1988.
That all changed with the bombing of flight 103 in December of 1988. Bookings dropped like a rock system wise. All the progress the comapny had made went down the drain. Some say that the tragic end of flight 103 was what ultimetely put Pan Am under. Of course, years and years of mismanagement took its toll on the one proud airline. 103 was the final turn in the screw so to speak.
Yanksn4 From United States of America, joined Dec 2003, 1404 posts, RR: 11
Reply 2, posted (11 years 6 months 4 weeks 1 day 23 hours ago) and read 2635 times:
I would have to yes, I mean just look at the two biggest examples: Pan Am and TWa. After Lockerbie, Pan Am was devastated and everyone i guess feared flying them. Same thing with Twa after the crash off long island
Henpol747 From Mexico, joined Jun 2001, 588 posts, RR: 1
Reply 3, posted (11 years 6 months 4 weeks 1 day 23 hours ago) and read 2614 times:
Couldn´t agree more with you guys. Some examples? Taesa, ValueJet, PanAm, Twa, Swissair.
Nevertheless, Air France, Singapore, Korean Air, Japan Airlines, and many others have had major mishaps and are still doing fine!!
N754pr From , joined Dec 1969, posts, RR:
Reply 4, posted (11 years 6 months 4 weeks 1 day 23 hours ago) and read 2577 times:
If you have badly run airline like TWA and PAN AM the answer is YES.
Airlines like Korean Air and China Airlines have crashed more planes then I can name but they are doing great! What about SQ, they had a major crash and various minor accidents but they are also doing fine, so the answer is NO.
SEAPete From United States of America, joined Mar 2004, 67 posts, RR: 0
Reply 5, posted (11 years 6 months 4 weeks 1 day 23 hours ago) and read 2562 times:
I think you can cite many examples on either side of the argument. I suspect that what you will find if you were to examine the financials of those airlines that survived and those that didn't you will find that those that didn't survive were in much worse financial shape that those that did. A good airline that is well managed expects a crash will eventually happen and will have funds to cover their liability, but if they are operating on a very thin margin, as airlines often do even in the best of times, then the expected loss of revenue from a drop in market share combined with not having the funds available to cover liability incurred from the crash.
Consider two examples. Valuejet was in scary financial condition and got shut down by the government which lead it to fold and re-incarnate as Air Tran. Alaska had a crash in 2000 which created a lot of government scrutiny and remains strong to this day and has had a growth cycle during the last couple of years.
Srbmod From , joined Dec 1969, posts, RR:
Reply 6, posted (11 years 6 months 4 weeks 1 day 23 hours ago) and read 2556 times:
Valujet never went into bankruptcy, they were on the brink a few times as a result of 592, but never filed for bankruptcy. The merger with AirTran was just to get away from the image the Valujet name had taken on as a result of the crash.
Mia777 From United States of America, joined Sep 2002, 1165 posts, RR: 5
Reply 7, posted (11 years 6 months 4 weeks 1 day 23 hours ago) and read 2523 times:
I think another good example would be Fine Air of Miami. This is one of the more unfortunate coincidences of aviation. The day (maybe the day after) the company went public there was that awful crash after the plane was improperly loaded and it collided with a building on the airport's perimeter and the pilots and some bystanders died. From then on, they obviously went into a financial downspin and then merged with Arrow Air of Miami and now they are in bankruptcy as well...
MSYtristar From , joined Dec 1969, posts, RR:
Reply 10, posted (11 years 6 months 4 weeks 1 day 23 hours ago) and read 2466 times:
L'Express, a regional carrier which flew Beech 1900's in Alabama, Louisiana, and Texas during the late 80's/early 90's. One of their 1900's went down while enroute from MOB to BHM. The airline never recovered from that. I have a picture of one of their purple, green, and gold aircraft hanging up in my room actually.