Tuesday, Sept. 18, 2001 | 10:42 a.m.
SUN STAFF AND WIRE REPORTS
The White House and congressional leaders vowed Monday to move quickly on a multibillion-dollar emergency aid package for the airline industry, which announced more layoffs Monday and was hit hard on Wall Street because of last week's terrorist attacks.
Airlines, a key component of the big Las Vegas casino gambling and tourism industry, saw their equity value slashed as investors unloaded travel industry stocks Monday. For example:
Administration officials and industry executives appeared confident that they would win congressional approval for a large bailout, although the proposal still faced close scrutiny from a group of the industry's longtime critics on Capitol Hill, notably Sen. Fritz Hollings, D-S.C., the chairman of the Senate Commerce Committee.
Warning that several large air carriers faced bankruptcy in the aftermath of the deadly attacks last Tuesday at the World Trade Center in New York and at the Pentagon, industry executives lobbied furiously on Capitol Hill on Monday for a bailout estimated at $15 billion to $24 billion.
They could cite new evidence on Monday of the industry's plight, as several airlines announced service cutbacks and layoffs.
Airline executives were scheduled to meet today at the White House with Transportation Secretary Norman Y. Mineta and other senior administration and congressional officials over the rescue package, which would include immediate grants of $5 billion. The White House said it was eager to help the industry.
"The president is concerned about the effects of terrorist acts on the financial condition of the airlines and he has directed his staff to develop a specific set of proposals to help the industry," said Claire Buchan, a spokeswoman. "They will work quickly."
But Hollings seemed unsympathetic to the airline's plight.
"The airlines told us they were going broke long before these attacks occurred, while at the same time giving their executives $120 million in salaries and bonuses this year," he said in a statement, adding that he would be willing to consider federal aid to the airlines "if they give up monopolistic control of the nation's hub airports."
Rep. Ellen O. Tauscher, D-Calif., who is on the House aviation subcommittee, said that she would support an aid package that reimbursed the industry for its losses during a four-day period last week in which the government halted air travel.
But she said that Congress had to be careful not to set precedent that other, possibly less deserving industries might follow in seeking bailouts. "We all understand the insurance industry can't be too far behind," she said. "The travel industry, the hotel industry -- there are many people that are dramatically effected by the efforts of these terrorists."
In Las Vegas in the meantime, McCarran International Airport officials reported the airport had a total of 805 operations on Sunday, about 89 percent of a normal weekend getaway day. But most of the planes were less than half full, airport observers and passengers on the flights said.
Southwest Airlines, the busiest carrier at McCarran, has had the most success at returning to a normal schedule. But it, too, has had below-normal passenger numbers.
"We're hearing that most of the airlines are over the hump in terms of getting stranded people where they need to go," said Hilarie Grey, a spokeswoman for McCarran. "But there's still a psychological fear of flying out there and it's going to take at least a couple of weeks" for passengers to return.
Grey said she was impressed with how quickly Southwest returned to normal operations, but noted that the company with 169 daily flights to and from Las Vegas has had fewer customers.
Since passengers aren't flying in great numbers, airlines are implementing cost-cutting measures to stay afloat.
America West Airlines, the second-busiest commercial carrier at McCarran, announced Monday that it is reducing operations by 20 percent and laying off 2,000 employees.
The move comes two days after National Airlines, Las Vegas, announced its own 20 percent operations reduction and plans to lay off 300 employees. US Airways, which only has eight Las Vegas flights a day, also announced a 20 percent reduction in service Monday and will lay off 11,000 employees. American Airlines and Delta are expected to announce reductions today.
Patty Nowack, a spokeswoman for Tempe, Ariz.-based America West, said decisions haven't been reached on how many pilots, flight attendants, maintenance workers or customer service agents would be laid off or in what cities most of the employees would be let go. Nowack also said it hasn't been determined where routes would be discontinued or if the company plans to reduce levels at several cities, or eliminate entire destinations from its map.
"The planning department is working on that," Nowack said. "We could have a new schedule as early as (today) and the reductions in force will be accomplished over time."
The layoffs will occur by attrition, deferred hiring and, finally, selected reductions, she said.
The America West reductions figure to affect some of the company's 1,000 Las Vegas employees since McCarran serves as a hub for the airline. Other America West hubs are at Phoenix and Columbus, Ohio.
Earlier Monday America West announced flight cancellations for the rest of the week, but there was no indication that those cancellations would be the same as the routes the airline plans to eliminate.
Today, Wednesday and Friday, the airline has canceled six daily Las Vegas departures, and for Thursday, it has canceled a seventh.
The airline is eliminating daily flights to and from Washington's Ronald Reagan National Airport, which is closed. It also has eliminated two daily round trips to New York's John F. Kennedy International Airport and one each to and from Cleveland and San Francisco.
On Wednesday and Thursday, flights to and from Minneapolis are being eliminated and Thursday and Friday, flights to and from Milwaukee have been canceled.
America West also announced another cost-cutting measure -- the elimination of food service from all of its flights. Nowack said the move not only would save money, but it would help flights get out on time since there would be less servicing of aircraft. The company had no estimate on how much that would save.
Another airline struggling to stay afloat gave details of its service reduction Monday.
Houston-based Continental, which has operated 15 flights a day to and from McCarran and said last week that it is laying off 12,000 employees, said two round trips in and out of Las Vegas would be lost. Continental is deleting one flight each to and from Cleveland and Newark, N.J., both company hubs. Continental will still have two daily flights to and from Cleveland and four to and from Newark.
Continental announced Monday that part of its reduction strategy is to eliminate 10 cities from its route map, including Las Vegas rival Atlantic City, N.J. Continental service also will be eliminated in Abilene, San Angelo, Tyler and Waco, Texas; Houston's Hobby Airport; Daytona Beach and Melbourne, Fla.; Dusseldorf, Germany; and London's Stansted Airport.
Chicago-based United Airlines, the No. 3 carrier at McCarran, hasn't announced permanent service reduction for Las Vegas but its list of canceled flights this week has knocked out one of 10 round trips to Denver, one of 10 flights to Los Angeles, one of six to Chicago O'Hare International Airport and one of two to Washington's Dulles International Airport.
Las Vegas' two high-profile overseas air carriers have had mixed results since the terrorist attacks. Virgin Atlantic Airlines announced Monday that it is trimming one of its three weekly round-trip flights between McCarran and London's Gatwick International Airport next month. Virgin also announced it was laying off 1,200 employees and dramatically scaling back flights between Great Britain and North America.
Japan Airlines, meanwhile, said no service reductions are planned for that company's five weekly flights between Las Vegas and Tokyo's Narita International Airport.
But the most success during the recent hard times has been demonstrated by Dallas-based Southwest.
Spokeswoman Kristin Nelson said not only did Southwest operate 98 percent of its normal Sunday schedule, but 97.6 percent of those flights departed on time.
Nelson said service returned to normal Monday and that the company plans no job actions, keeping a 30-year record of no mass layoffs intact.
Roz Santangelo, Southwest's Las Vegas spokeswoman, said the long lines that formed at the airport Friday have disappeared. She said passengers from four days' worth of canceled flights jammed into the airport that day. They were all seeking whatever empty seats were available but overwhelmed customer service agents.
The Sun's Richard N. Velotta contributed to this report.
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