Congress has firmly told the US airline industry that no further federal aid is forthcoming despite the financial crisis that has swamped the majors.
House aviation subcommittee chairman John Mica says he is staunch in his belief and that others, including key Senate figures, share his commitment. "Airlines in trouble must be prepared to fend for themselves. Those losing money must either reduce costs dramatically or they will not survive," he says.
Perhaps ironically, the six chief executives to whom Mica gave his stern warning had not come to Congress seeking any aid, although they each stressed opposition to rising security costs and the threatened new federal charges of about $435 million a year for security. Mica, whose panel must approve almost any proposed change in law, says he is sympathetic to that position and also that he supports an extension of federally backed war-risk insurance for the industry. That would save the majors about $700 million a year.
Some carriers told Mica that they, too, opposed any further aid. AirTran Airways chief executive Joe Leonard says: "The government seems determined to stop the marketplace from choosing what it wants. We should keep the exit doors open and let inefficient carriers, be they low cost or high cost, simply fail." That, Leonard says, would be the most efficient way to reduce overcapacity.
Source: Airline Business
