Airlines' pleas for relief draw little sympathy

By Carl Weiser
Gannett News Service

WASHINGTON — The chairman of Delta Air Lines pleaded with Congress yesterday to provide financial help to the airline industry, warning that "our industry's viability is seriously in question."

But congressional leaders flatly told Leo Mullin and other industry leaders at a House hearing that there would be no major help coming.

"Let me say quite frankly and firmly today: There will be no bailout," said Rep. John Mica, R-Fla., chairman of the House Aviation Subcommittee.

But House members left open the possibility of some smaller gestures sought by the industry, which insists it is trying only to get the federal government to pay for added costs it has imposed since the Sept. 11 terrorist attacks.

For Delta alone, the costs of post-attack security measures are about $660 million this year, Mullin said. The Delta chief estimates costs for the industry's six major carriers would be about $4 billion.

The airlines say they have done about everything they can to cut costs. The six major airlines — Delta, Northwest, American, US Airways, Continental and United — have cut more than 70,000 jobs, idled 267 aircraft and cut routes.

But those cuts have not returned the industry to profitability, and industry officials and analysts predict it will come close to matching last year's $7.4 billion loss.

US Airways has filed for bankruptcy and United, the industry's second-largest carrier, has hinted at that possibility.

"I only wish I could say, 'what a difference a year makes,'" said American Airlines CEO Donald Carty. "But unfortunately I cannot. ... More layoffs, airline bankruptcies and route cutbacks are surely on the horizon."

Mica said Congress might be willing to cap the airlines' liability, extend its subsidies for war risk insurance and review some of the security measures imposed.

Last September the federal government provided $5 billion to keep the airlines afloat and another $10 billion in loan guarantees.