Posted on 09/10/2002 2:29:56 PM PDT by GeneD
WASHINGTON (Reuters) - Pessimistic about the airline industry's condition, U.S. House Democratic Leader Richard Gephardt said Tuesday he thinks another bailout is unlikely but aid might be warranted to assist an orderly downsizing.
In an interview with Reuters reporters and editors, Gephardt suggested airline executives should report to Congress soon about their continued crisis following a year in which Wall Street analysts say the industry lost $10 billion.
Congress approved $15 billion for the airlines last year just 11 days after the Sept. 11 hijack attacks, and Gephardt said he was unsure whether any more legislation addressing the industry's woes was needed now.
But he said one eventual option for Congress might be to pick up airline costs such as health care and pensions that are associated with reorganizing an industry in decline.
Some large U.S. steelmakers have sought, unsuccessfully, to get Congress to pick up some of these "legacy" costs in order to help them merge as the industry consolidates.
"I'm really worried about the airline industry," said Gephardt, a Missouri Democrat. "They're struggling with how to stay alive ..."
"In the end, I don't know that the government can bail them out, unless there's some plan to downsize the whole industry, and for us to pick up some of the costs that are associated with that downsizing," he said.
"You may be in a situation where to save enough of the industry, you've just got to help them downsize."
BLEEDING RED INK
The top U.S. carriers, already struggling before last Sept. 11's attacks involving four commercial airliners, have lost more than $10 billion since and are on track to lose another $6 billion this year and probably next, Wall Street analysts say.
Sixth-largest carrier, US Airways, filed last month for bankruptcy protection from its creditors while it tries to reorganize. UAL Corp's United Airlines, the No. 2 carrier, has said it may have to do the same.
Traffic remains about 10 percent lower domestically than it was before the attacks, in which jets belonging to AMR Corp.'s American Airlines and United were hijacked and slammed into the World Trade Center, the Pentagon, and a Pennsylvania field.
Gephardt said he had spoken recently with American's chief executive Donald Carty, and suggested that Carty bring other airline chiefs to Capitol Hill as had been done a year ago just after the Sept. 11 attacks.
"I said ... maybe you need to get the top airlines executives back in here and update us on where you are and what you are trying to do, because it is a very important industry, in every state," the House Democratic leader said.
"It would be a good idea, I think, to sit down with them and try to find out what is going on. It's certainly, I think, advisable to try to have a meeting. I'm not at all clear that they need some legislation at this point."
Part of the problem facing the airlines, Gephardt said, was that after the Sept 11 attacks, many business passengers and "day" passengers who previously took short flights have stayed away.
The government has paid out $4.3 billion of the $5 billion approved for the cash portion of the airline bailout approved last year, but only a small portion of the $10 billion in loan guarantees has been tapped.
Most loan applications have been rejected, and some big airlines were uncomfortable applying because of stringent loan conditions, like giving the government a stake in their business.
Copyright 2002, Reuters News Service
Yeah, that ought to get the customers breaking your door down to buy your product. Marketing geniuses, all of them.
Let's be clear about something.
The FAA, our federal government, ordered the airlines to cease the business of transporting passengers in their vehicles called aircrafts after the 9/11 terrorist attack using hijacked aircraft to protect citizens.
Amendment V, U.S. Constitution states:
"...nor shall private property be taken for public use without just compensation."
We the taxpayers owe the airlines "just compensation" for those few days the airlines were prohibited from using their private property.
We the taxpayers also owe the airlines for the expense of FAA, our federal government, mandated security equipment and personnel for the same reason.
And when those "private" security personnel are replaced by "federalized" security personnel, this will be a clear 4th amendment violation of every citizen's rights.
"Eyebrows" is referring to extending unemployment coverage for those who get downsized. An extra month or two, 10 weeks. Maybe increasing amortization on aircraft.
It is easier to 'downsize' or to destroy, than it is to build.
Let's see Gephardt do something constructive instead (if that isn't oxymoronic).
Nah, this is just a coincidence; it can't be anything else.
The airlines are LIABLE for not following their own established security procedures. When they are done paying that off, they can get in line behind everyone who didn't get people killed through neglegence.
U.S. Claims Court will hear your 5th amendment violation and will award you (stockholders) their "just compensation."
For example, in Missouri, where I live, a federal rails to trails program was initiated.
The landowners who gave the railroads a right of way had contracts that said when the railroads no longer were using the right of way, ownership reverted to the landowner.
Missouri and federal legislators ignored whose property was being taken for public use when the rail to trails program began.
The owners sued and won. $10 million dollars to Missouri and the rest of the nation's taxpayers.
You see when the true constitutional price for regulations from all of the ABC regulatory agencies are allocated properly, compenstaion for public use of private property for instance, I think the taxpayers will revolt against the regulations as not worth it.
SR
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