Effect of terrorism on Southwest

9-11 In the 6 years preceding 9/11, during what is undoubtedly a boom period for the economy, the industry earned a mere 3.5% net profit compared to an average of 11.5% for the S&P 500. In the wake of the events of September 11th, the industry's problems are brought to the forefront. Both, business and leisure travelers have avoided air travel or moved to low-cost flights. Airlines have been particularly hard hit by the fall in business …

…and $900 million in increased insurance costs. These costs are being borne by the airlines, but as Giovanni Bisignani, Director-General of the International Air Transport Association (IATA) said, "There is no argument that airlines must bear the cost of ordinary aviation security. But the situation is now extraordinary... in many cases we are being asked to pay for what is national security". The extra costs of these security measures have totaled over $5 billion since the attacks.