"DHS Funded Study Estimates Another Terrorist Attack Could Cost U.S. Commercial Aviation Up to $420 Billion"

Tuesday, August 21, 2007

Another Terrorist Attack Could Cost U.S. Commercial Aviation Up to $420
Billion, Risk Analysis Study Shows 
Business Wire

 
Based on the scenario thought most likely, another attack on U.S. commercial
aviation could cost as much as $420 billion, according to a new study
appearing in the current issue of the scientific journal Risk Analysis. The
authors conducted their research on the basis that the attack would shut the
entire system down for seven days and require a two-year recovery period. 

"The Economic Impacts of a Terrorist Attack on the U.S. Commercial Aviation
System" by four scientists at the University of Southern California Center
for Risk and Economic Analysis of Terrorism Events appears in a special
homeland security issue of the peer-reviewed journal (Vol. 27, No. 3, 2007),
which is published by the McLean-based Society for Risk Analysis
(www.sra.org). As the sixth anniversary of Sept. 11, 2001, approaches, the
conclusions from this study should help commercial aviation authorities with
their emergency planning. 

Peter Gordon, James E. Moore II, Ji Young Park and Harry W. Richardson used
a careful, conservative analysis of the after-effects of September 11 to
model a single attack on a major airport, causing an initial shut-down of
the entire U.S. commercial air transport system followed by a recovery
period. Their key findings are: 

   -- An initial seven-day shutdown would be three days longer than the
shutdown after 9/11 because protection against future attacks would require
not only controlling who gets on planes, but also a search of areas
surrounding airports and installation of stronger protective and security
services at or near airport perimeters. 

   -- This seven-day shutdown would cost $12.5 to $21.3 billion, including
airline tickets, ground transportation, accommodations, food, gifts/shopping
and amusements, as well as all air freight (20 percent of total air
revenues). 

   -- After operation resumes, commercial aviation would take two years to
recover. Air freight transport would proceed normally, but passenger travel
would be diminished due to psychological aftereffects of the attack. 

   -- Overall loss estimates for the two years range from $214 to $420
billion. 

   -- These loss estimates capture the economic consequences that would
follow an attack, but exclude the costs associated with the loss of life and
the replacement cost of aircraft that would be incurred as the result of an
attack. 

"We assume a single attack on a major airport; we believe that this would
shut down the whole system with little difference in impact than if several
airports were attacked simultaneously...," the authors said in Risk
Analysis. "These estimates...suggest that the high costs of effective
countermeasures may be justified." 

This research was supported by a grant from the U.S. Department of Homeland
Security.

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