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American Morning

America's New War: Airlines Look to Take Major Hit in Wake of Tuesday's Hijackings

Aired September 17, 2001 - 11:31   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.
PAULA ZAHN, CNN ANCHOR: Let's go back to Andy Serwer. We finally got your name right. Give me some credit here.

Your reaction to everything we just heard, from what Greg reported, from what Tom Parsons is reporting about the flying public.

ANDY SERWER, "FORTUNE" MAGAZINE: The airline business has been a terrible business for years and years and years. It wasn't exactly a bastion of strength and health even before this started. It has been a basketcase. It was weakening as the economy was weakening.

ZAHN: And that is sort of reflected. We were looking at the overall picture, but the airline stocks...

SERWER: Yes, the airline stocks down 40 percent. The big ones, United, Delta, American, Northwest, U.S. Airlines. All of them doing very poorly, and this is a business that will be very, very different going forward. There is no question about that.

ZAHN: So it is not premature for someone to start asking questions about the survival of individual airlines.

SERWER: I think that's right. I think this business will change, Paula. I think there is going to be more consolidation. I think you will see companies being put together. There may be partnerships with overseas airlines. We have seen that already before, but they be even more firmed up and more formalized.

ZAHN: But the bottom line is, and I think we mentioned this I later, is it will ultimately give consumers less choices.

SERWER: I think that's right. Flying is going to be will be more difficult. You are going to spend more time going through security. And it's going to be a difficult situation.

Your reflections on what the intraday graphic is showing us right now.

ZAHN: We have this big drop at the beginning, a nice very sharp slide there at one point. We leveled off. We trended it up. Now we're trending back down a bit. If you can call this stabilization, maybe this is it. The overseas markets were down about five percent over the past couple of days, and we're down somewhere around five percent. So maybe that's what mr. market is telling us, that this tragedy means that securities on the New York Stock Exchange need to be marked down five percent. We're not over yet. I still think there are going to be more bumps, some more very dark days ahead in terms of the economy, in terms of market. Here is where we are right now, and that's all we really know.

ZAHN: I know we were asking Lou Dobbs and Christine Romans questions earlier on and they were feeling that even though the overseas markets showed that, that there was a five percent a drop and then the stability was regained later in the trading day. They don't necessarily think the U.S. markets are going to do the same thing.

SERWER: Well, yes and no. The U.S. -- the markets follow the lead of the U.S. market. And since the U.S. markets weren't trading, they were following what they thought the U.S. markets were doing. Maybe they were right, in that the markets are down five percent, and they matched it, sort of presaging that drop.

ZAHN: You spent a lot of time on the floor of the New York Stock Exchange. Give us your insights into how some of those traders are feeling right now. It is an unprecedented level of pressure on them, isn't it.

SERWER: It as lot of pressure. This is a very tight-knit group of people. It's a very patriotic group. We have seen a lot of American flags down there today. But I have to tell you, if you go the floor of the New York Stock Exchange, you are going to see a lot of American flags, even before this tragedy. These are people who care about America and work awfully, awfully hard. There is a tremendous amount of pressure down there, and today, the eyes of the are on them,and I think they truly are responding.

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