Give consumers funds to rescue the airlines

With the whole travel industry struggling, the federal government should revisit its airline-bailout package to give the public and workers a better deal.

Perhaps the government should take a cue from the tax rebate program and provide air travel vouchers directly to members of the public. Whatever the mechanism, there must be a way to ensure that the public and employees in all segments of the travel industry — from cab drivers to Boeing workers — benefit from the bailout.

Congress approved the bailout for the national good, not the welfare of airline stockholders, creditors and executives. Passed just 10 days after the Sept. 11 massacres , the package includes $10 billion for loan guarantees. An initial $5 billion in cash was to head off immediate collapse, which was critical to the entire nation.

Now, airlines are beginning to apply for loans, a process that will involve judging the strength of their business plans. And the industry is making it clear that it wants possible mergers and consolidations to be viewed in a positive light during the loan process.


What do we think will happen with airline mergers? With less competition, won’t prices go up? Won’t the public — which is bailing out the airlines — wind up with fewer choices? And won’t the public — which the airlines are supposed to serve — either have to give up flying or pay much more for the privilege?

The board overseeing the airline loans has already said it will ask applicants whether the government — the taxpayers — will receive stock in the case of a loan default. That’s a commendable step toward requiring that taxpayers receive some of the benefits from the airline bailout, and it carries echoes of the Chrysler rescue some years ago.

The board should look for ways to go considerably farther on the public’s behalf, however. If taxpayers were given a voucher to be used against air-travel expenses, the money would get to the airlines. But vouchers would also help put money in the hands of cab drivers, hotel employees, restaurant servers and museum or theme-park workers. The same effect would also occur if, say, the federal board required loans be conditioned on airlines offering discounts to U.S. taxpayers. If an innovative approach requires congressional approval, the board should not hesitate to ask lawmakers to re-think their package.

In any case, some process that puts the money into actual air travel would spread the benefits to more sectors of the economy while doing at least as much as a straight loan for the airlines. Ultimately, that would protect jobs everywhere, including those here in airline manufacturing.

Saving jobs was the intent when Congress rescued Chrysler. That is always a worthy goal but never more so than wartime, when the country’s success rests, in part, on its ability to pull together.

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