Posted on: Wednesday, September 19, 2001
The September 11th attack
Bush tells airlines to expect financial relief
By Jim Abrams
Associated Press
WASHINGTON — Congress and the Bush administration told the nation's airlines yesterday they can expect quick, multibillion-dollar relief to help them recover from last week's terrorist attacks.
Federal help is needed, said Senate Majority Leader Tom Daschle, D-S.D., because of the "extraordinary vulnerability that we see economically right now with all the airlines, some more than others."
Airline executives met separately during the day with Transportation Secretary Norman Mineta, White House officials and congressional leaders. The meetings were for the industry to make a case for federal aid to help the airlines deal with mounting losses caused by the interruption of flights last week and the prospects for significantly reduced business in coming months.
The House floated a $15 billion relief plan last Friday to include $2.5 billion in immediate grants and $12.5 billion in loans and credits. The industry has asked for $24 billion.
Michael Wascom, spokesman for the Air Transport Association, said Monday the industry requested $11.2 billion in loans and grants, $7.8 billion in tax relief such as suspension of the jet fuel tax and excise tax and $5 billion in direct cash aid.
Leo Mullin, chairman of Delta Air Lines, said financial consequences of the Sept. 11 attacks could approach the $24 billion figure through next summer. "There is no question that this industry has suffered enormous financial damage via this terrible situation," Mullin said.
Major carriers already have announced more than 26,000 layoffs, and the industry has warned that figure could grow to 100,000 in coming weeks. Airlines such as American, Continental, Delta, Northwest and United have scaled back their schedules by 20 percent.
Boeing is planning to lay off 20 to 30 percent of its commercial airline work force — roughly 31,000 people — as a result of the terrorists attacks, a congressional source said yesterday on condition of anonymity. The aircraft maker will make an announcement today, the source said.
Neither the administration nor congressional leaders were ready to suggest a final dollar amount, or a timetable for action, although Rep. Roy Blunt, R-Mo., said the House might move forward with legislation this week.
Mineta said the administration hoped to come up with its own package by early next week. There's recognition, he said, that the airline industry has "got to be made whole."
House Democratic leader Dick Gephardt of Missouri stressed that the airline relief package would be separate from the $40 billion in emergency spending Congress passed last week to help victims of the attacks on the World Trade Center and the Pentagon and track down the perpetrators.
Advisers to President Bush voiced caution about providing federal aid to companies that faced financial problems before the Sept. 11 attacks. "There may be some short-term things that absolutely need to be done" to help the industry, presidential counselor Karen Hughes said yesterday. "But you don't want to subsidize ... bad business practices."
Blunt said that any direct compensation provided the airlines would be specifically to make up for losses suffered when the government ordered the grounding of all flights after terrorists hijacked four aircraft.
