How Things Can Change So Quickly - 6 YEARS NO!


Aug 20, 2002
Panel approves $3.2 billion in aid

WASHINGTON - Senate and House conferees working on legislation to pay for the war in Iraq agreed late Friday on an airline industry assistance package worth $3.2 billion as part of the final bill members are expected to pass today.
Carriers would receive $2.4 billion in cash as reimbursement for security costs ordered by the federal government, including $100 million spent to reinforce cockpit doors.
Airlines should be able to make it with this boost, said Sen. Kay Bailey Hutchison, R-Texas, a member of the Senate Appropriations Committee who has championed an airline assistance package.
The Senate and House passed different versions of an airline rescue provision last week and agreed Friday to a compromise.
The bill will also suspend passengers'' fees and carriers'' security payments from June 1 to Sept. 30. And it will extend unemployment insurance to airline workers and those in related industries for 26 weeks.
Carriers will benefit from the extension of government-sponsored war risk insurance for a year.
The bill suspends the $2.50-per-flight-segment security fee (up to $10 per trip) paid by passengers and fees paid by airlines for security at airports.
Airline employees and other workers in related industries who have been laid off will get a 26-week extension of unemployment benefits. The provision is estimated to cost $275 million.
At one point, the benefit had been reduced to 13 additional weeks. But Sen. Arlen Specter, a Pennsylvania Republican, and Rep. David Obey, a Wisconsin Democrat, prodded the committee to extend unemployment insurance for 26 weeks and expand the benefit to workers for carriers, airline manufacturers, suppliers and airport workers.
The move restores an amendment sponsored by Sen. Patty Murray, D-Wash.
Obey said Congress should help workers because negotiators had weakened proposed restrictions on airline executives'' compensation.
If we''re going to take such great care of the CEOs of the airlines in this coming amendment, it seems to me we could be taking a little better care of the workers, Obey said.
The extension of war risk insurance for a year is a benefit that carriers value at $800 million.
The funds would not come out of the federal budget, but it saves airlines costly premiums for hard-to-get coverage.
As a condition of receiving the assistance, carriers will have to show that they have cut costs by at least 10 percent since June 2002 and freeze compensation -- salaries and bonuses -- for the top two executives at 2002 levels.
Should carriers expect to get anything after this bailout?
I really think this is it for the airlines, Hutchison said.
After the 9-11 terrorist attacks, Congress gave the airlines $15 billion to help recover.
In this bailout, we are absolving them of that share of security costs. ... This should give them a chance to recover in a normal economy, the Texas lawmaker said.
Hutchison said she is pleased with the package.
I believe once the war effects are gone, that then we will be able to address the economy and trying to jump-start the economy, and I hope that will not only help the overall economy but get the airlines back on their feet.''''
This report includes material from the Associated Press.