WASHINGTON (AP) – Airline executives told Congress yesterday that their companies still face major financial problems that probably will worsen if America goes to war with Iraq.
Air travel has yet to return to pre-Sept. 11 levels. The number of people flying in November was down almost 18 percent from November 2000, according to the Transportation Department.
Since the attacks, the major airlines have laid off more than 80,000 employees, cut wages for others and reduced the number of flights, but they still expect to lose $9 billion last year. Two have filed for bankruptcy in the last six months – United Air Lines and US Airways.
“We’ve got most of the airlines broke and the rest of them begging,” said Sen. Ernest Hollings of South Carolina, the ranking Democrat on the Senate Commerce Committee that held a hearing on the financial condition of the airlines.
War in Iraq could make a bad situation even worse, American Airlines chief executive Don Carty told the committee. When the Gulf War occurred more than a decade ago, Carty said air travel plummeted.
What Congress can do to help the airlines “depends largely on whether or not we have a war with Iraq,” he said.
Congress has twice helped the airlines since Sept. 11. In November 2001, President Bush signed into law a $15 billion aid package that included $5 billion in cash assistance and a $10 billion loan guarantee program.
Last year, Congress enacted a law to extend government-issued war-risk insurance and to limit liability against companies for the terrorist attacks, saving airlines an estimated $1 billion.
Carty said airlines need more, but he said they have yet to reach consensus on what Congress can do to help. Northwest Airlines’ chief executive Richard Anderson also testified that the airlines need relief. Other airlines were represented as spectators by the Air Transport Association.
Some lawmakers were skeptical that more government aid is needed.
Incoming committee Chairman John McCain (R-Ariz.) said low-fare carriers such as Southwest Airlines and JetBlue are making money. “The moral of the story is that every airline does not have to be unprofitable,” he said.