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    A Times Editorial

    Keeping airlines aloft

    The airlines deserve special help from Washington, but lawmakers should carefully target the aid they give an industry endangered by the terrorist attacks.

    © St. Petersburg Times,
    published September 19, 2001


    There's little doubt that the nation's airlines will need some form of federal help to cope with the acute financial consequences of the terrorist attacks in New York and Washington. Though people are flying again after last week's shutdown, passenger confidence will be slow to recover. Investor confidence may be even slower, based on the way airline stocks have been pummeled since the markets reopened. The airlines also face new expenses. New security rules will be costly, and the two largest airlines, American and United, whose hijacked planes became guided missiles, face billions of dollars in potential liability claims.

    Still, Washington's help for the airlines should be thoughtful and targeted, not hasty and indiscriminate. During a late-night session last week, the House almost approved a sketchy plan that would have given the airlines an immediate $2.5-billion in cash, plus billions more in loan guarantees. It also would have allowed President Bush to delay collecting taxes from the airlines. At the same time, lawmakers were considering broad immunity from lawsuits for American and United.

    Some form of financial assistance and legal protection is warranted. The airlines aren't just another industry. Air transportation is an essential element of our modern economy, particularly Florida's tourist industry. But determining the fairest and most effective ways to help the airlines will require far more study than the issue received in Washington last week. Taxpayers should not be asked to rescue the airlines from financial problems of their own making.

    Any financial aid should begin with compensation for the revenue the airlines lost while a government-imposed shutdown of air traffic was in effect. Beyond that, Washington should consider aid that would allow the airlines to maintain their current capacities while waiting for the level of air traffic to return to something close to normal. The airlines that have been forced to ground planes and lay off employees during the current crisis shouldn't have to scramble to meet the public's needs once demand increases.

    However, an overly broad bailout would be counterproductive. New safety and security measures will increase the costs of air travel -- but those costs have been artificially low for years. The government should not be expected to absorb all the additional expense of air travel. Nor should the government ignore other trends, such as increased video-conferencing and use of alternative forms of transportation, that could permanently affect the public's travel patterns.

    The question of limiting liability may be even more complicated. American and United have asked for legislation confining their responsibility to the passengers and crew of the four doomed aircraft. There are more than 5,000 other victims to consider, those who were at the World Trade Center and Pentagon, and the claims of their survivors are as meritorious as those of people whose parents, siblings and children were aboard the airplanes.

    This national tragedy should not become a feast for trial lawyers. It may be that the government will have to consider some reasonable limits on liability payments. However, it is premature to be talking about limits on liability when no one yet knows the extent to which the airlines were insured. The airlines paid dearly for that insurance, the costs of which were embedded in the ticket prices that passengers paid.

    One way in which Congress might fairly act would be to supplement the insurance proceeds available to victims. Policy limits could not have been set with so massive a casualty toll in mind. The government could justifiably pay in recognition of the extent to which poor airport security and lax federal regulation facilitated the hijackings. There is also some precedent: During World War II, the British government paid for civilian casualties and property damage from German bombs.

    Congress should act aggressively to address these issues, but it shouldn't act heedlessly. Rep. Lloyd Doggett, D-Texas, who almost single-handedly blocked the bailout plan the House considered last week, had the right perspective about aid for the airlines. "Perhaps (a) subsidy is justified," he said. "I may vote for it myself because it is so compelling. But if it is so compelling, it will be as compelling in the bright light of day as it is with insults and threats at midnight."

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