Living in the free world means being able to fly when you want to. And governments must be prepared to pay to protect this liberty
It didn't take long for normal business hostilities to resume. After the numbing horror of 11 September, the spotlight quickly switched to the financial turmoil facing US airlines and European carriers reliant on North Atlantic business. By the time the New York Stock Exchange re-opened on Monday, stock prices were plunging and the airlines responded by announcing huge job losses, axeing routes and grounding aircraft. Without immediate government aid, airline bosses warned, many of the major carriers in the USA could be bankrupt by Christmas.
The response from the USA has been generous, although Congress has been careful not to give a blank cheque. At time of writing, Capitol Hill was set to approve a $5 billion emergency aid package for the nation's airlines, far short of what the carriers were asking for. On the opposite side of the Atlantic where British Airways - which carries more passengers to North America than anyone - and rival Virgin Atlantic have been the worst affected by the crisis, pleas for help have met with a cooler response. The UK Government is hamstrung by European Union rules banning state subsidies, although as Flight International was going to press Brussels appeared to be considering relaxing its rules.
Not everyone in the industry, however, feels magnanimous. Some have gone so far as to suggest that carriers are cynically exploiting the wave of revulsion at the terrorist acts and sympathy for the victims to seek bail-outs from a parlous financial situation that would have been the case even had the events of 11 September not happened. Budget airlines, including EasyJet and Ryanair - which have been steadily chipping away at BA and other flag carriers' once-profitable European business routes - say selective help to the majors could shore up unprofitable European services and that state aid should be distributed among all carriers, even those without a transatlantic presence.
Certainly any help for the airline industry must be distributed equitably and it looks as if this is what will happen in the USA, with the air taxi operator in Texas receiving the same - proportionally - as United and American. The immediate problem facing US airlines is the possibility of running out of cash during the next few weeks. With the backlog of passengers stranded by the events of 11 September now cleared, the slump in passenger confidence will leave the airlines having to fly, in some cases, near-empty aircraft. With little hope of securing finance from investors, airlines will simply not be able to unload costs quickly enough to cope with plummeting revenues. That is why the only solution is a direct injection of Federal cash. Assuming there are no more terrorist attacks, passengers may return, slowly. But airlines then will have to cope with new problems - the cost of implementing security measures being one of the most serious. Israeli airline El Al is arguably the safest airline in the world to fly on - despite the ever-present terrorist threat. But the cost of implementing El Al-style security measures, from pressurised, double armoured doors to the flight deck, to individually interviewing each passenger, would be crippling. That is why the USA, the richest nation in the world, must step in and fund new security measures directly. They may not go as far as El Al, but they must be good enough to achieve two ends: restoring passenger confidence in air transport and ensuring aircraft are never again hijacked.
In Europe, the argument for subsidising airlines directly is less convincing. Airlines which have found themselves dependent on the transatlantic market did so for what seemed at the time good business reasons. It would certainly be unfair to support them and not smaller airlines. However, as President Bush has said, this is a war that affects not just America, but the entire civilised world. An airliner in the hands of a terrorist is a deadly bomb whatever the livery on the tail. There must be a world-wide push by governments to enhance air transport security and this must be done immediately and in a co-ordinated way - even if it means diverting funds from conventional defence budgets. In this asymmetric war it is the vigilant baggage checker, the sky marshal and the undercover intelligence operative who will be in the front line - not the tank, the fighter or the destroyer.
Source: Flight International
