Airlines Ask For
Billions in Aid to Head Off Bankruptcies, Layoffs
By Melanie Starkey
Capital News Service
Wednesday, Sept. 19, 2001
WASHINGTON - Airline officials told
Congress Wednesday that they expect to cut 100,000 jobs -- hundreds of which
lawmakers fear would be in Maryland -- and that the cuts will be even deeper
without billions of dollars in immediate assistance.
In testimony to the
House Transportation and Infrastructure Committee, the airlines said they
lost $220 million a day during last week's government-imposed shutdown.
They said they face further losses due to eroded consumer confidence after
the Sept. 11 hijacking of four commercial airliners.
Industry
representatives are pushing for an immediate cash infusion of $5 billion,
which would not be paid back, part of a $24 billion package including
grants, loans and tax deferments.
"There is no question there has to be
a federal role in the buttressing of an economic freefall," said Rep.
Wayne Gilchrest, R-Kennedyville, and a committee member. He noted that US
Airways, the second-largest carrier at Baltimore/Washington International
Airport, announced plans Monday to cut 11,000 jobs.
Gilchrest said he hoped
BWI employees would escape the cuts, since BWI is a major hub for the
airline, but it would ultimately depend on how many flights US Airways could
book into and out of the city. "The potential for losing several
hundred positions out of Maryland is very real," said Gilchrest.
Airline industry losses would eventually trickle down to the rest of the
travel industry in Maryland, affecting travel agencies, hotels, restaurants,
car rental centers and others, Gilchrest said.
Delta Airlines Chairman and
CEO Leo F. Mullin testified that the nationwide air shutdown, coupled with a
drastic and probably prolonged drop in passenger demand, means bankruptcy
followed by liquidation for many airlines. Mullin said that bankruptcies
could occur within days without immediate government help, especially once
airlines learn of their liability in the lives and property lost both in the
air and on the ground.
The industry foresees layoffs of more than 100,000
employees, even with government help, Mullin said. Leaders said they hope to
rehire many, once business begins to return to levels before last week's
attacks, although none predict a 100 percent recovery.
Gilchrest said that,
based upon the amount of revenue lost in the shutdown, "there will be a
substantial amount given that won't be paid back" by the airlines, even
if they get back on their feet.
In addition to financial aid, the industry
asked that the federal government take over all security screening functions
and provide sky marshals on domestic flights. They also asked for money to
meet safety requirements, such as reinforcement of cockpit doors and
enhanced screening devices.
Rep. Peter DeFazio, D-Ore., suggested airlines
add a $3 security surcharge to tickets, an idea that Gilchrest supported.
"I think this is the time when a surcharge would be greeted by the
flying public as something they would be willing to pay," Gilchrest
said.
But airline representatives balked, saying such a surcharge could make
a substantial difference in ticket sales for carriers with very close
prices.
The industry also asked for legislation to free airlines from
liability for damage to persons and property on the ground and to let
companies meet to discuss capacity reductions.
Reps. Robert Ehrlich,
R-Timonium, and Steny Hoyer, D-Mechanicsville, both said they supported
federal aid to the airline industry. A spokeswoman for Rep. Roscoe Bartlett,
R-Frederick, said he had not yet determined which proposals to support, but
that "restoring and maintaining safe air travel for people and goods
is a federal responsibility."
Supporters of the airline package said
they hope to quickly move a bill through the House and Senate and get it to
President Bush's desk by next week.
Copyright © 2001 University of Maryland College of
Journalism
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