Editorial
Our airlines need appropriate help

The most immediately alarming economic consequence of last week's terrorist attacks is neither Monday's precipitous stock market drop nor the threat of a recession, but rather the dire state of the nation's airlines.

Investors were spooked by the Dow Jones Industrial Average's 684-point drop, the largest ever. But seen in percentage terms, it didn't even make the top 10; the Dow's collapse in 1987 — also a Monday — was three times bigger. Yesterday's slight decline suggests a calm and rational market.

Talk of recession is no laughing matter, and a serious global downturn is likely. The world has experienced the business cycle before, however, and will recover in due course. The bad news, of course, as we said here earlier this week, is that Hawai'i's heavy dependence on tourism will heighten and lengthen the effect. "It's our vital mission," we said, "to reduce Hawai'i's total helplessness in the face of changes far from our shores."

All of this pales in comparison to the crisis faced by our airline industry. Already in bad shape before last Tuesday, the airlines lost billions in revenues when planes were grounded by the emergency, and will lose billions more as worried passengers choose to stay home. United and American Airlines face unprecedented liability.

Yet Congress must approach the industry's plea for help with the utmost care. It has several reasons to help, not the least of which is government's traditional interest in ensuring national transportation viability. Insofar as government played a role in lax airport security and an intelligence failure, and in ordering the industry shutdown, aid is also required.

But it's beyond the government's mandate to spread all the pain to taxpayers.

Airlines still have the ability to pass higher costs through to the traveler, and last week's tragedies will almost surely drive up the cost of air travel. If people choose to fly less, those are market forces at work. They can't be halted by Congress.

Would a government bailout of the airline industry, coupled perhaps with a spate of bargain-basement fares, minimize the downturn faced by Hawai'i tourism? Maybe. But as we've said, it's time for us to start finding ways to end our nearly total subservience to outside forces.

Congress should be amenable to the possibility of limiting airline liabilities, recompensing them for time lost last week, and relieving them of security responsibilities. But it must stop short of a bailout.