Crisis: United and American are the only airlines coping directly with
the horror of passengers and crew members killed last week. But the
entire industry is facing meltdown: a potential collapse of passenger
confidence and a whole range of new safety regimens to put in place.
Polls show Americans are worried about hijacking, and Hewlett-Packard
told The Wall Street Journal it will limit employee travel in the
The industry faces financial ruin, with one source revealing that major
airlines have 15 to 45 days of available cash to keep them afloat.
Continental, Northwest, American, and US Airways have all announced
layoffs. Midway has already gone out of business.
Communications issues: The industry faces the daunting task of keeping
passengers up to date on changing schedules and publicizing new security
procedures to customers and crew. At the same time, it must remain
sensitive to the victims of the attacks.
A delicate lobbying and PR effort has already begun to win a government
bailout for the industry.
Meeting the challenge: Any precedent for this level of PR challenge is
nonexistent. "The industry has never faced anything of this magnitude
before," says Cindi Kurczewski, a Delta spokesperson.
United and American have maintained their focus on the families of the
victims, with victim-support teams dispatched and toll-free phone lines
set up for information about passengers.
Keeping passengers informed of schedule changes has been a primary task
for all airlines. Delta, for example, has corporate PR teams, culled
from the ranks of the different departments, available 24 hours a day to
ensure schedule updates are immediately available to the press.
US Airways has used every possible resource to reach customers,
providing schedule changes and security information. "It is essential to
reach out through every possible avenue of communications, whether it's
frequent-flyer newsletters or a press release on the website," says
Richard Weintraub, senior director of US Airways.
How the industry will handle the PR challenge of restoring long-term
confidence in safe flying is not yet clear. But economic realities are
not far from anyone's mind. Burson-Marsteller is working with American
Airlines and the Air Transport Association on both victim and passenger
issues, and is lobbying the government for assistance. The agency is
helping to frame the messaging, developing third-party outreach with
contacts on Capitol Hill as the industry seeks a $20 billion
"The airlines have been forced to step forward and talk about the
economic realities, and are portrayed by some as callous," says Chris
Chiames, MD of public affairs at Burson, and head of its airline
But Chiames says that so far, the industry is striking the right balance
between its concerns and grief over the tragedies. "Airlines are on a PR
tightrope, and they are staying on it at the moment."
Crisis: Telecoms, utilities, and other businesses directly affected by
the tragedy - particularly those at or close to Ground Zero - have to
provide relief and information to customers who are without service.
These companies face a potentially massive loss in revenue and
irreversible damage to their reputations if they don't respond in a
timely, appropriate manner. They also face the prospect of losing
Communications issues: Restoring faith in their company and assuaging
Meeting the challenge: In the aftermath of the disaster, affected
companies had to implement wartime-like media relations offices to
respond to press inquiries and communicate with customers and
Con Edison mobilized 140 work crews to repair damage that left 14,000
customers without power. The in-house comms team quickly informed local
media that emergency lines were open so customers could find out when
service would be restored, and the PR staff also used its website to
provide updates about the damaged grid. Michael Clendenin, director of
media relations for Con Edison, took reporters to Ground Zero to
interview emergency teams.
Con Edison's media team, headed by VP Francis Rashike, appealed to TV
networks to update customers on progress in restoring power. All the
networks ran stories, as did many print outlets. Con Edison refused to
discuss how much it spent as a result of the tragedy.
Another company affected by Tuesday's tragedy was Verizon. Seven out of
its 10 cell phone stations were knocked out. Faced with an overloaded
grid, the Verizon media office's first task was to inform the public
that Manhattan's 4,000 pay phones were available for free. Local TV
networks relayed the information to the public, and Verizon's media
relations team placed notices on its website so that consumers would
know the latest progress. (Another message on the website stated, "Our
business is to help people communicate, and never has this mission been
as important.") Verizon chief of comms Eric Rabe headed the media team,
and appeared on CNNfn and other programs to talk about what Verizon was
doing to repair its network.
American Express' in-house communications staff - divided into three
units to handle the crisis: corporate card, bank card, and general
advisors - worked from their homes to convey the message that the
company was open for business. The CEO of American Express appeared on
CNBC, Moneyline, and other TV shows to let consumers know that American
Express was not affected.
Additional people were mobilized to provide customers with other
emergency services, and the company website provided information to
investors. "It's important for our CEO to be out with sleeves rolled up
so investors and the public know that business will continue as normal,"
says Monica Beaupre, company spokesperson.
Crisis: Insurance companies are going to be expected to make
unprecedented payouts to cover losses and damage to life, health,
property, vehicles, and businesses.
Communications issues: Insurance companies must assure investors that
the company can manage the finances of massive payments on policies
affected by the crisis without going bankrupt, all while remaining
compassionate to the extreme loss suffered by customers.
Meeting the challenge: Analysts are unsure how many years it will take
for the full impact of the tragedies to reach the insurance
Current estimates hover above $20 billion, and Maurice Greenberg,
CEO of American International Group, warned MSNBC that the damage caused
by the attacks may total the largest loss in insurance history.
As ranked by MSNBC, the US insurer with the most anticipated loss from
the attack is Berkshire Hathaway, with 3-5% of industry losses. The
Omaha, NE-based firm is the holding company for financial wunderkind
The company primarily operates property/casualty insurance, as well as
reinsurance through subsidiaries National Indemnity and GEICO.
A company employee said the 13-person company would not do any
interviews with any media regarding the terrorist attacks, as per
She said the company has no a PR department. However, a company press
release dated the day after the attacks said it would be many years
before a range could be established for insurance industry losses.
At the other end of the communications scale is the next highest-ranked
US company on the MSNBC list: Employers Re, also known as GE Employers
Reinsurance Corporation (ERC), will suffer $600 million in
The ERC website holds a company statement saying thoughts and prayers
are with the families and friends of victims. It goes on to express its
sympathies to victims, close friends, and business acquaintances in the
financial and insurance community. Finally, the ERC statement says the
company was aware that no financial payment could make up for human
suffering, but that ERC hoped by providing resources and support to
customers it could help alleviate some pressure.
The company also posted an open condolence letter from chairman,
president, and CEO Ron Pressman, which included Pressman's direct phone
number. A separate financial release from Fairfield, CT-based ERC
estimated the division's impact on third-quarter losses for parent
company GE. In the release, GE chairman and CEO Jeff Immelt says
monetary losses cannot compare with the suffering of the attack's
victims. He also aims to give investors a measure of assurance, saying
ERC's viability and GE's fundamental financial strengths were not
Crisis: Many employees have suffered extreme personal losses. Staff must
continue to commute through damaged areas and work in temporary
Communications issues: The stock markets have to counter against the
psychological effects of the tragedy to prevent a chaotic free fall.
Meeting the challenge: Before 9:30am last Monday, when the NASDAQ and
New York Stock Exchange (NYSE) held a joint opening-bell-ringing
ceremony followed by two minutes of silence and the singing of God Bless
America, NASDAQ CEO Hardwick Simmons issued an open statement.
The letter relates the NASDAQ's condolences and prayers to the families
of victims of the hijackings two weeks ago. The letter then reads, "The
US capital markets are open. This is important and significant. A sign
that our great nation will not be intimidated." But the markets plunged
anyway. That day, $600 billion in market cap was erased.
In that first day of trading following four days of silence, the longest
market blackout in history, the DJIA lost 7% of its value, down 679
points to close at 8,920.70. The NASDAQ lost 6.85%, or 116.09 points, to
close at 1,579.28. Both closes, after volume more than double normal
levels, were the lowest since 1998.
A textbook phrase was repeated often: the markets hate uncertainty. That
uncertainty was so physically close to the NYSE, that traders and
investors arrived to work wearing now-familiar white masks to filter the
smoke still choking the area.
But in the media, financial leaders applauded market performances. US
Treasury Secretary Paul O'Neill gave a symbolic thumbs-up to the first
day of trading. Keying off of the only record-breaking high number of
the day, volume, he said, "Not only did we trade, we traded more shares
than ever before." Earlier, in a speech at the opening ceremony, O'Neill
told traders to "act like Americans" and not engage in panic
The US government had instituted a rare, between-sessions half-point cut
in interest rates. It had also encouraged patriotism-motivated stock
buying during the blackout. But a headline on TheStreet.com summed up
many people's impressions of that first day: "Stocks sag despite Fed's
But perhaps even the most ardent flag-waving PR plan couldn't cut
through the blackening power of that World Trade Center soot. As
economist Carl Weinburg told the BBC, "We have no precedent against
which to gauge the psychology of what will happen."
To counter that uncertainty, the exchanges may have to change their
comms functions from merely descriptive to compassionate and optimistic.
Failing that, the government may have to change its strategy from
flags-as-dollars to dollars-as-dollars.