The basics: Right after 9/11 the government shut down air travel, all flights were cancelled, and airlines lost money. Upon the reopening of air travel, there was a big drop in air travel ~30%, and the economy slumped after 9/11 when there was a mini-recession. Also, new security measures costed the airlines money. Since the TSA started there have been estimates that airline travel has dropped by around 10%. People try to find other modes of transportation to avoid long airport security waits.

Meanwhile, the price of oil went from $23/barrel to over $90/barrel right now. (It maxed out at ~$145/barrel in '08 and has been up and down since). That was probably the biggest hit the aviation industry took. Oil in the 90's had dipped as low as $10/barrel, so the airlines were already feeling some pain from oil prices when 9/11 hit, and it just got worse the more the oil prices went up. Then, the recession hit in 2008.

It seems that since 9/11 it has been one thing after another that has hit the airline industry hard. Some are a result of 9/11, some are not, and combined they have changed the state of the industry quite a bit.