Congress Unlikely To Grant More Aid

Regional Aviation News
Updating Developments in Regional Aviation

Congress Unlikely To Grant More Aid – Reregulate Industry

April 30, 2003

Key congressional lawmakers say they will oppose further assistance for the airline industry without tougher language on how the money is spent, and those who favor reregulating the industry contend it’s unlikely it will ever happen. “If they came back to the well a third time they would not get my support no matter what the condition of the industry is,” Sen. John McCain (R-Ariz.), chairman of the powerful Commerce Committee, told The DAILY yesterday. Nor is McCain in any hurry to consider reregulation. “If there’s going to be some kind of shakeout, then we would have to consider what Congress’s role is when that shakeout is completed.” Senate Commerce Ranking Member Ernest Hollings (D-S.C.) said lawmakers “will not get it [the airline industry] reregulated. I wish we could.”

Sen. John Rockefeller (D-W.Va.), ranking member on the Commerce aviation subcommittee, said he would “vote to reregulate any time of day,” but there is no movement on Capitol Hill to do so, and “there is no way it will happen.” Commerce Member Sen. Ron Wyden (D-Ore.) said he would “pull out all the stops” to include language in any airline aid package controlling how the money is spent, and he is in no hurry to give the carriers further help. “At the minimum, I would put the brakes on additional money unless they [airline executives] are willing to hold the line” on perks and bonuses. The war supplemental, including airline relief, recently enacted by Congress, contained language capping executive benefits, but House Democrats, in particular

Appropriations Ranking Member David Obey (D-Wis.) spoke on the floor for tougher restrictions. Rep. James Oberstar (D-Minn.), ranking member on House Transportation, said the Administration opposed limitations on executive pay written into law when the measure was proposed during the post Sept. 11 bailout. House Minority Leader Rep. Steny Hoyer (D-Md.) said revelations at American about perks that protect top executives even in the case of bankruptcy – while the company was asking for more than $1 billion in employee give-backs – give “Congress pause to reflect whether they [airlines] are the victims of their own bad policy as opposed to Sept. 11” and the SARS pneumonia. He said the airlines are important to the economy, but if they need more money they will face “tougher language” that limits how it’s spent. House Majority Leader Tom DeLay (R-Texas) said the “industry needs to shake out” but he did not see any airline legislation on the agenda.

Rep. Peter DeFazio, (D-Ore.), ranking member on House Transportation aviation subcommittee, said the entire issue of airline executive perks shows an “arrogance that pervades this administration and our society that these people are unique. Look at the great things they’ve done with these airlines,” he said, pointing to the Chapter 11 filings. There should be substantial constraints on these funds,” DeFazio said, in particular some assurance that the airlines will continue service if they receive federal dollars. “You give an airline a bunch of money, then they cut out markets and routes – are you buying a public benefit here?” “It seems to me the most basic obligation should be required to provide continuity of service and benefit line employees before executives. It’s basically ‘stringless’ money.” “If they come back to the well a third time there will be a heck of a lot more scrutiny,” DeFazio cautioned. “If it [the money] goes to guarantee executive pensions or tender offers or to create a new line of business, that is certainly to my mind not the intent of Congress.” -DM

Source: Aviation Daily, April 30, 2003