House, Senate Moving Toward Airline Relief Measure

Regional Aviation News
Updating Developments in Regional Aviation

March 19 , 2003

Rep. James Oberstar (D-Minn.), ranking member on the House Transportation Committee, will introduce legislation today that would give airlines financial relief as the U.S. prepares for war with Iraq. Senate Democrats said they are also considering a relief package, and Republicans say they want to work with the Administration to provide some assistance, possibly in the form of tax relief. Oberstar’s bill, the Aviation Industry Stabilization Act of 2003, puts a permanent limit on airline liability for third-party damages from acts of terrorism to $100 million. It reopens the federal loan guarantee program, authorizing a maximum of $3 billion in federal credit instruments; requires drawing down at least 500,000 barrels of fuel per day to offset fuel price spikes, and authorizes DOT reimburse airlines for financial losses attributable to a drop in traffic because of war. It directs the Transportation Security Administration to reimburse airlines and airports for screening-related activities and space.

The bill directs TSA to reimburse airlines for the cost of strengthening cockpit doors, about $312 million; directs TSA to improve mail screening so it can be carried on passenger airlines and develop recommendations to enhance the cargo known shipper program. It requires TSA to re-evaluate seating air marshals once cockpit doors have been hardened and ensures air carriers that take part in the Civil Reserve Air Fleet program are compensated for positioning, depositioning and ferrying portions of missions. It mandates that within 90 days after the bill’s enactment the General Accounting Office analyze factors that contribute to the financial troubles of air carriers to determine how to alleviate them. Senate Commerce Committee Chair John McCain (R-Ariz.) and Trent Lott (R-Miss.), chair of the aviation subcommittee, said they are interested in helping the airlines but want an agreement from the Administration first. Lott said Commerce has done “due diligence with hearings” over the last month, and McCain said hearings have “accurately described the difficulties of the airline industry. We would like to join with the Administration to come forward with one proposal,” such as temporary tax relief. Sen. Ernest Hollings (D-S.C.), Commerce ranking member, said he is concerned Congress has not helped airline employees laid off after Sept. 11.

Sen. John Rockefeller (D-W.Va.) said that while he was unaware of any movement in the Senate to introduce a companion bill to Oberstar’s, airlines “are going to get relief.” Senate Finance Committee Chair Charles Grassley (R-Iowa) said the government should not provide relief to airlines until they get their internal financial house in order and bring their costs down to Southwest’s level of operations. “It would be unfair for the federal government to come in and help companies that are operating at a loss, and Southwest is making a profit,” he said. House Democrats today intend to introduce their Fiscal Year 2004 alternate budget proposal, and Democratic Whip Steny Hoyer (DMd.) said it contains a “transportation function” that could be used to pay for arming commercial aircraft with anti-missile defense systems. A spokesman for Rep. John Spratt (D-S.C.), Ranking Democrat on the House Budget committee, could not confirm Hoyer’s comment and said information on the budget would not be released until today. –DM

Source: Aviation Daily, March 19, 2003