House expected to move on aid for airline industry

  • Jim Abrams / Associated Press
  • Sunday, September 16, 2001 9:00pm
  • Business

By Jim Abrams

Associated Press

WASHINGTON – The House is expected to move quickly this week to help the airline industry cope with economic losses they could face as a result of last week’s terrorist attacks.

The House could pass legislation providing at least $15 billion in grants and credit to the industry, which was crippled by the shutdown following Tuesday’s attacks and now must deal with a prolonged period of reduced passenger loads and added security expenses.

“If we don’t act soon, I’m afraid that it will be even more difficult to resuscitate this key industry in the future,” said Sen. John McCain, R-Ariz., ranking Republican on the Senate Commerce Committee.

House supporters tried to push an airline bailout bill through late Friday, but were blocked by several of their colleagues warning against moving too hastily. That bill would have provided $2.5 billion to compensate the airlines for direct losses and opened credit lines of $12.5 billion to struggling carriers.

Rep. Paul Kanjorski of Pennsylvania, a senior Democrat on the House Financial Services Committee, said they are trying to fashion a bill that will compensate the industry for their losses without creating a new entitlement program or interfering with the market. “We don’t want to end up bailing out airlines that are already dead.”

Shoring up the industry has strong bipartisan backing: House Democratic leader Dick Gephardt of Missouri is leading the effort and House Speaker Dennis Hastert, R-Ill., said on CNN Monday that Congress needs to “make sure that America keeps flying because that’s very, very important to keep this country going.”

Gephardt, speaking Monday at a high school outside St. Louis, said House and Senate lawmakers would meet with airline executives Tuesday “so we can clearly understand what their problem is. We hope to address that by the end of the week.”

White House Press Secretary Ari Fleischer said Monday that President Bush was “very concerned about the health of the airline industry.”

One carrier, the already ailing Midway Airlines, has shut down since the attacks, and others have laid off personnel and made significant cuts in scheduled flights in anticipation of reduced business and falling revenues. House leadership aides said the industry had presented members with a wish list of some $20 billion to $24 billion in assistance.

US Airways said Monday it expects to lay off 11,000 employees, or 24 percent of its work force, and cut nationwide service.

The House Transportation Committee is likely to hold a hearing on the issue Wednesday as lawmakers begin to return to Washington after the Jewish New Year break.

The Senate could move somewhat slower: Senate Commerce Committee Chairman Fritz Hollings, D-S.C., issued a statement Saturday noting that before the attack the airlines were claiming insolvency but giving their executives $120 million in salaries and bonuses. “I would be willing to consider compensation if they give up monopolistic control of the nation’s hub airports,” he said.

The Association of Retail Travel Agents made the same argument in opposing federal money for the airlines, saying such investments should go to improving airline and airport security rather than financial bailouts.

The American Society of Travel Agents contended that it should be included in any aid package. “We seek not to be at the head of the line,” said ASTA President and CEO Richard Copland. “But we must call upon the Congress … to include in any aid package relief for other Americans similarly affected and crucially important to the eventual recovery.”

The insurance industry, also hit hard by the attacks on the World Trade Center and the Pentagon, have not asked for federal aid so far, said Julie Rochman, spokeswoman for the American Insurance Association.

She said the industry had been talking to lawmakers to assure them that, while their losses were sizable, “we are well-capitalized and able to meet our financial obligations.”

Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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