On the issue of this so called airline bailout I seem to be in the minority when I beg and plead that it's a huge mistake to give them a pass. Why should they be different than any other biz.. I know you compared this situation to Chrysler, but we're talking about a much larger amount. I found this today in our local and I think it's right on the money
Airlines need help, not handout
Editorial Board
Austin American-Statesman
Thursday, September 20, 2001
Congress appears committed to quick financial assistance to keep America's vital air transportation system functioning during the crisis created by the attacks on the World Trade Center and the Pentagon.
Some aid is warranted. The airline industry lost at least $500 million when the government grounded its planes after the terrorist hijackings Sept. 11. But the cost of the 48-hour stand down is a minor part of the problems facing airline companies -- three of them based in Texas. More important are the industry's requests for grants, loan guarantees and protection from lawsuits.
U.S. Rep. Lloyd Doggett, D-Austin, stepped into the fray to halt a quick bailout for the carriers. He said he opposed the blank-check proposals being sought in the wake of an enormous tragedy. He wants the airlines to answer pointed questions and Congress to consider reasonable solutions before deciding how much help is warranted.
It was prudent to pause long enough to ponder the right response to the country's troubled aviation system. But there is little question that the government must step in if a necessary part of our vast and intricate transportation network is going to survive the terrorist assault.
The central question for Congress is how far to go in assisting a vital but crippled industry. Some of what has been put forward is simple, expedient and not too costly for the country to absorb. Allowing the companies to keep for a year the user fees and excise taxes that they collect from passengers and shippers, for instance, would save $10 billion, which is less than the aviation trust fund's current balance. Another suggestion is to waive for a time the federal tax on aviation fuel. That 4.4 cents-a-gallon tax costs the airlines about $1 billion annually.
But those minor matters are off the table for the time being. The carriers and Congress are working on a $17.5 billion package of grants and loans to help the airlines stay in business. That seems too high an amount for the taxpayers to shoulder for a single industry, one of the many that has been hurt by this year's economic slump and the terror atrocities that struck in New York, outside Washington, D.C., and in rural Pennsylvania.
Aviation companies, like many others, are going to have to restructure to survive. A bailout that protects one industry from the inevitable and necessary shakeout to come -- even a transportation system as necessary as aviation -- simply isn't wise. The amount sought by the airlines would shield them while leaving other struggling companies to face failure without government aid.
One costly burden the airlines should shed is airport security. The federal government should assume responsibility for security at all the nation's airports at once. Despite years of criticism about airport security and pleas for the Federal Aviation Administration to step in, airport security has remained a function of the airlines and airports.
Unfortunately, the critics have been proven tragically correct in their assessments. Washington can no longer avoid the responsibility of providing security for air travel in the United States. It is not a job to be contracted out to the lowest bidder paying minimum wage and with little federal oversight.
But the overwhelming problem the airlines face is their legal liability in the aftermath of the crashes and the destruction they wrought. The flood of lawsuits expected against the airlines could bankrupt United Airlines and Fort Worth-based American Airlines, the world's largest carrier. The claims and suits also could prevent them from purchasing insurance in the future.
It doesn't make sense to exempt American and United from the legal liability every other business in the country faces. But the scale of the event and the enormity of the loss argue for some consideration such as capping liability or otherwise mitigating the legal damage sure to come.
A critical and vulnerable industry has suffered a potentially lethal blow. The air carriers are facing layoffs that could reach staggering numbers, cutbacks in service and huge financial losses. Congress should step in, but only so that the airlines can right themselves, not protect themselves from the serious problems facing business and industry all across America in these dark days.
ps---night Johnboy |
