US major airlines are lobbying Congress for relief from US government-mandated security costs, claiming they will comprise 30-40% of 2002 pre-tax operating losses.
Testifying last week, American Airlines chief executive Don Carty and Delta Air Lines chief executive Leo Mullin asked lawmakers to ease the burden of funding post-11 September security measures. They claim sec- urity costs for 2002 will total $4 billion for the top six US carriers.
"The cumulative effect of new government taxes, fees, mandates and restrictions has added billions in costs to the airlines that Washington simply cannot continue to expect us to pay and at the same time assume we will survive," said Carty.
Lawmakers appear prepared to extend by a year a programme under which the US government is providing terrorism and war-risk insurance coverage to airlines. They are also likely to re-open the $10 billion federal loan guarantee programme if the USA goes to war with Iraq.
Carty told the House of Representatives aviation subcommittee that war with Iraq is a "chilling prospect" for airlines and would probably plunge the industry into an even more debilitating financial state.
A key House member shot down the airlines' top request - to eliminate the $2.50 per segment security fee imposed on all US tickets. Mullin said the fee, which was supposed to be passed on to passengers, has instead been absorbed by carriers at a combined cost of $1.6 billion for the six largest airlines. Subcommittee chairman John Mica told Carty and Mullin: "You're going to have to figure out a way to pass that on to your customers."
Lawmakers may assist in other ways, such as reimbursing airlines for first-class seats taken by air marshals and easing restrictions on carrying mail in the bellies of passenger aircraft.
Source: Flight International
