- The Washington Times - Tuesday, March 25, 2003

The Bush administration said yesterday it was considering financial aid for airlines at a time they are pleading for relief from the financial ravages of war, terrorism and a weak economy.
"We continue to consult with the airlines," White House spokesman Ari Fleischer said.
Airline-industry leaders and Bush administration economic advisers have met to discuss an airline bailout, Mr. Fleischer said. However, at least part of the industry's woes do not result from war or terrorism, he said.
"I'm not going to prejudge all outcomes," Mr. Fleischer said about the possibility of federal assistance.
Yesterday, about 20 United Airlines' flight attendants handed out leaflets to travelers at Washington Dulles International Airport to ask for their support for government assistance.
"The airline industry is already a casualty of the war on terrorism," the Association of Flight Attendants (AFA), the union representing United Airlines flight attendants, said in a statement. "Fuel costs skyrocketed as tensions built in the Middle East and revenues are down due to fewer people flying because of the increased threat of terrorism during war."
Airlines say 150,000 jobs from their industry have been lost since the September 11 terrorist attacks. They predict as many as 70,000 more job losses because of the war with Iraq.
"That's what this is all about, trying to save jobs," said Michael Ely, president of AFA Council 21. Council 21 represents about 2,000 United Airlines flight attendants at Dulles, Ronald Reagan Washington National and Baltimore-Washington International airports.
The Air Transport Association, the trade group for major airlines, also is asking Congress for federal assistance.
The association estimates U.S. airlines could lose $4 billion this year in war-related costs. The International Civil Aviation Organization said yesterdaywar costs for airlines worldwide could reach $10 billion.
Some airlines report bookings are down 20 percent to 30 percent from last year, when they already were suffering financially.
Delta Air Lines said yesterday it would reduce the number of its flights worldwide by 12 percent, joining its competitors in announcing schedule cuts.
The airline industry is seeking from the government reimbursement for security costs, repeal of the passenger-security tax, extension of the war-risk insurance program, direct economic aid and extension of unemployment benefits to laid-off or furloughed workers.
The passenger-security tax is a surcharge the federal government attaches to airline tickets, whichnormally is $5 on a round-trip ticket. Airlines say it depresses their ticket sales by raising the cost of travel.
Under the war-risk insurance program, the government pays for any extraordinary damages resulting from war or terrorism, rather than insurance companies. Airlines say their insurance costs would be astronomical if the program is not extended beyond its expiration date this year.
However, resistance in Congress to helping the airlines is expected to be greater now than after September 11, when lawmakers approved $10.5 billion in loan guarantees and $5 billion in grants for the industry.
Congress is expressing concern about overcapacity in the industry and the risk of giving corporate welfare to mismanaged companies.
Sen. Kay Bailey Hutchison, Texas Republican and a member of the Senate Commerce, Science and Transportation aviation subcommittee, has said protecting taxpayers from improper spending is as important as rescuing the carriers.
Congress is considering relaxing antitrust laws to allow airlines to share routes and eliminating their fuel taxes.
Among the airlines that want government assistance is Arlington's US Airways. The ailing company struck a deal with its pilots Saturday that it said is crucial to its emergence from bankruptcy protection by the end of the month.
US Airways officials say the deal includes concessions by the pilots but refused to disclose details until they are submitted this week to the Pension Benefit Guaranty Corp., the federal agency that regulates pensions.
United Airlines, which also is in bankruptcy protection, said in court documents last week it might be forced to liquidate unless it can win significant labor concessions.
American Airlines, the world's largest airline, is trying to cut deals on airplane leases and labor contracts to avoid Chapter 11 bankruptcy.
The agreement between US Airways and the Air Line Pilots Association clears the way for the airline to secure $1.24 billion in private financing and $900 million in federal loan guarantees. A loan guarantee means the federal government will repay a loan if the company defaults.
The agreement affects 4,700 current pilots and 1,100 retired pilots.
"Without that pension agreement, the company would not have been able to emerge from Chapter 11" bankruptcy protection, company spokesman David Castelveter said yesterday. "It's that simple."

LOAD COMMENTS ()

 

Click to Read More

Click to Hide