Airline Bailout gives management a brand new hammer!

airlineorphan

Senior
Aug 20, 2002
380
0
www.usaviation.com
Hey folks,

Watch out, they''re probably coming back again for more! Looks like the airline bailout contains language requiring more slash and burn by airlines.

Below is an excerpt from the airline bailout portion of the war appropriations bill. The language here is from H.R. 1559 and I got it from the below link:

http://thomas.loc.gov/cgi-bin/query/D?c108...p/~c108PmGkHu::

I''m not certain it is included in the final version passed today by both chambers, but I would be willing to bet it is!

This language will require any carrier that gets aid in this package to submit a plan to cut operational costs by 10% of June 2002 costs or by the amount of aid received (whichever is greater).

US Airways employees likely have already met that amount, but watch out for management coming to us saying, We need this aid. We''ll liquidate without this aid. It hurts so much to ask for more, but it is out of our hands.... (hurts from their maniacal laughter in the Crystal Palace)

Elsewhere (Title IV, Section 407) the the legislation gets around to closing the barn door on executive compensation. It caps compensation at the outrageous 2002 levels. Yeah, that''ll show''em!

-Airlineorphan

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TITLE IV: AVIATION INDUSTRY RELIEF PROVISIONS
.............
SEC. 408. AIR CARRIERS TO SUBMIT
OPERATIONAL EXPENSE REDUCTION PLANS.
(a) IN GENERAL- Each air carrier that receives financial assistance under this Act shall transmit a plan to the Comptroller General within 90 days after the date of enactment of this Act that, if implemented, will reduce that air carrier''s annual operating expenses by an amount equal to the greater of--
(1) 10 percent of that carrier''s annual operating expenses determined as of June 15, 2002; or
(2) the amount of financial assistance that air carrier has received or will receive under this Act.
(B) OPERATING EXPENSES- In determining annual operating expenses for purposes of this section, an air carrier shall compute operating expenses attributable to fuel on the basis of the average price of such fuel for June 15, 2002.