We use data on air passenger travel expenditures per passenger as well as statistical analysis of the air traffic lost for the two‐year aftermath of the September 11, 2001, attacks to estimate direct demand losses for air transportation services. These are used along with a national input‐output model to assess the full costs of these losses. Depending on assumptions made, the full losses to the U.S. economy were between $214.3 and $420.5 billion. These estimates are similar to those from other studies of such an event, and suggest that the high costs of effective countermeasures may be justified.