Jet Crash Sends Net Travel Stocks Down

13th Nov 2001

Shares of Internet travel companies were declining sharply today following the crash of an American Airlines A300 Airbus with 255 people on board shortly after takeoff at John F. Kennedy International airport in Queens.

It seems that there were no survivors aboard the aircraft, bound for the Dominican Republic, and there was no word on what caused the plane to go down in a Far Rockaway neighbourhood shortly after 9 a.m. Homes were ablaze and thick plumes of smoke could be seen for miles.

Bush administration officials said the FBI believed there was an explosion aboard the plane, and was investigating whether it was the result of a mechanical failure or sabotage.

The Associated Press later reported that a senior administration official, speaking on condition of anonymity, said: “It`s looking like it`s not a terrorist attack.”

Mayor Rudolph Giuliani put all of New York City on alert and all three major airports were closed for hours before they began reopening in the afternoon. Fighter jets were seen patrolling the skies above New York. All bridges and tunnels into the city were closed for a while and the United Nations was partially locked down.


The overall stock market quickly developed a bad case of the jitters after the crash; the Dow plunged 200 points, but recovered slightly and was down only 40 points at 2 p.m. Travel stocks were following the general downward trend, at one point off 6 to 11 percent, but they were recovering some as the day wore on.

Name-your-own-price travel site ( was down 27 cents or about 6 percent about 2 p.m., trading at $4.23.

Expedia (NASDAQ:EXPE)(

was down $1.34 or 4.3 percent to $29.87. The other major online travel player, Travelocity (NASDAQ:TVLY),(

was down 96 cents or about 6 percent to $14.60.

Travel sites had just been getting into recovery mode following the events of Sept. 11, which prompted a 30 to 50 percent decline in air travel.

The National Transportation Safety Board was designated the lead agency in the investigation of today`s crash, another signal that officials were leaning toward the theory that a mechanical problem was at fault.

Witnesses reported seeing parts of the plane, including an engine, fall from the sky before the crash. Tom Lynch, a retired firefighter, told WABC-TV that he was walking near his home when he heard the plane. “It wasn`t that loud. I heard a `WHOOF` and I saw what looked like a wing falling off the airplane,” Lynch said.

The crash could not have come at a worse time for the travel industry, which has been gearing up to handle the traditionally busy Thanksgiving-Christmas travel season in an uncertain market replete with beefed up security including National Guardsmen patrolling airports

Most online travel services have been rebounding faster than the rest of the travel industry in general; airline consortium site Orbitz had its best day ever last week. Priceline`s business was nearly back to normal, too.

But clearly today`s plane crash, whatever the reason turns out to be, will make more people pause before booking holiday travel.

“Even if it`s not a terrorist act, it doesn`t help confidence,” investment advisor James Glickenhaus of Glickenhaus & Co. told CBS Marketwatch. “Until we know, these are dark days. It`s impossible to be confident because you don`t know what you`re up against.”




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