Bush proposes aid for airlines

Thursday, Sept. 20, 2001 | 11:10 a.m.

SUN STAFF AND WIRE REPORTS

WASHINGTON -- President Bush is asking Congress to give the nation's financially struggling airlines a quick $5 billion in cash and help with any lawsuits stemming from last week's terrorist attacks.

Bush would put off the industry's request for additional billions of dollars in loans, which the airlines say they need to avert bankruptcies.

"This is an immediate reaction. This does not preclude additional actions," White House press secretary Ari Fleischer said.

"We'll continue to work with Congress on the question of loan guarantees," he said.

Bush will immediately spend $3 billion of the emergency funds that Congress gave him over the weekend to pay for airline and airport security improvements such as fortified cockpits, sky marshals and additional airport searches, Fleischer said.

In testimony prepared for the first of a series of congressional hearings on airport security in the wake of last week's terrorist attacks, Capt. Duane Woerth, president of the Air Line Pilots Association, said today he believes airlines should immediately install deadbolt locks on all airplane cockpits and an additional mesh-net door.

House Democratic leader Dick Gephardt of Missouri said details of the relief package were still being worked out between Congress and the administration. He said he hopes the final version will include help for the victims' families and airline workers laid off as a result of the attacks.

Under the package that White House advisers quietly presented to key congressional staff Wednesday night, Bush also proposed that the government give airlines "temporary terrorism risk insurance" on all their domestic flights for 180 days. Currently, only international routes have such coverage.

At the same time, Bush is proposing to help shield airlines from inevitable lawsuits related to last week's terrorist hijackings of four commercial jetliners. He would bar punitive damages and consolidate all lawsuits into a single federal court, the U.S. District Court for the Southern District of New York. The government also would pick up whatever cost of compensating victims for damages ultimately exceeds the limits of the airlines' insurance policies.

Another White House official said that once Bush's emergency measures were enacted he and the Congress would talk about loans in order to bolster the airlines' longer-term solvency.

The House originally suggested $15 billion for the industry in legislation proposed last week and the industry came back with a request for $24 billion.

Delta Air Lines Chairman Leo Mullin told Congress Wednesday the industry wanted $12.5 billion in credit and loans, plus $5 billion in immediate cash.

"Loan guarantees are essential for the aviation industry," David Messing, spokesman for Houston-based Continental Airlines, said. "Without a loan guarantee we put the national aviation infrastructure at risk."

Bush was expected to formally send his proposal to Congress today, even as airlines announced massive layoffs and projected huge losses in the aftermath of last week's terrorist attacks by hijackers using four jetliners.

"I think it's safe to say that among the top 10 airlines that there are three who are on the brink" of bankruptcy, Mullin said. He did not specify those three, but Douglas Parker, chairman of America West Airlines, said his company was one of several that could go under if the federal government did not step in.

America West, the No. 2 carrier in Las Vegas, said this week it's cutting 2,000 jobs.

Also in recent days: American Airlines and United Airlines each announced plans to cut 20,000 jobs and US Airways said it's cutting 11,000 workers.

Sen. Harry Reid, D-Nev., said he was willing to give the airlines "whatever they need" in bailout money.

The airlines help drive Nevada's No. 1 industry: tourism. Reid told Nevada reporters in a conference call that the state would see only "short-term slippage" in passengers flying into McCarran International Airport.

"We're going to fill those planes in a short time," Reid said. Later in an online Internet chat hosted by the Washington Post, Reid said airline bailouts, expected to finalized by Congress in the coming days, should buoy all airlines, including already bankrupt Las Vegas-based National Airlines.

Nevada's four-member delegation in Congress appears committed to a sizable bailout. Rep. Jim Gibbons, R-Nev., a former 17-year veteran airline pilot, has not said specifically how much he was willing to approve but stressed, "Securing the airline industry is vital to ensuring Nevada's prosperity."

Although specific dollar-figures have not been finalized, some sort of immediate aid to airlines -- to be doled out based on a formula -- has increasing bipartisan support in the House, said Michael O'Donovan, spokesman for Rep. Shelley Berkley, D-Nev.

archive