WASHINGTON — Senate Republicans agreed Friday on a $2.8 billion aid package for the nation's airlines, much less than the industry says it needs to offset slowdowns caused by terrorism worries and the war with Iraq.
The package would extend the war-risk insurance that protects airlines from liability for injuries to passengers during war or an act of terrorism and would reimburse the airlines $1.1 billion for security.
It also would give airlines a six-month break from passing on to the government the proceeds from a passenger security tax of up to $10 per round-trip ticket.
The Air Transport Association, an airline industry trade group, scaled back its effort to obtain $9 billion in tax relief after Congress seemed cool to the idea. Earlier this week, ATA President James May said airlines were instead looking for $4 billion in help for new security costs they have incurred since the attacks on the World Trade Center and the Pentagon.
Three of the 12 largest U.S. airlines — United, US Airways and Hawaiian — are in bankruptcy. May said that 10,000 airline jobs have been cut and advance bookings are down 20 percent to 40 percent since the war started.
Sen. Trent Lott, who chairs the Senate Commerce aviation subcommittee, said the Republican package "is an effective way to help the airlines with their security costs directly related to the war at this critical time."
Senate Appropriations Committee Chairman Ted Stevens, R-Alaska, said next week he'll add the proposal to the nearly $75 billion supplemental budget plan that includes funding for the war. Lawmakers want to approve the budget bill in the next two weeks.
House Speaker Dennis Hastert, R-Ill., has yet to approve the proposal. He's still looking at different options for helping the airlines, his spokesman said Friday. United Airlines has its headquarters in Chicago, and many of its employees live in Hastert's district.
White House officials have said President Bush believes market forces should be allowed to determine which airlines survive.
On Friday, White House budget director Mitchell Daniels would not close the door on including airline aid in the war spending bill.
"There may be some merit in the idea, recognizing the war has had some impact, and a temporary alleviation of that might make some sense," he told reporters on Friday. "The president and the administration are listening to ideas."
Daniels added that any aid "should be scaled to the event, not a make-whole exercise to solve unrelated problems."
The Senate Republicans' package includes $800 million to extend through next August war-risk insurance, which the government began issuing after the Sept. 11, 2001 terrorist attacks.
Taxpayers would pick up the remaining $2 billion of the proposal, according to a Lott spokeswoman, Susan Irby, including the $900 million from the tax on passengers and a security fee the government directly assesses the airlines.
The remaining $1.1 billion subsidy would reimburse the airlines for such security costs as bulletproof cockpit doors, aircraft inspections and document verification at security checkpoints, she said.
Airports would also get some help in the form of reimbursement for airport space now occupied by Transportation Security Administration workers.
On the Net: Air Transport Association: www.airlines.org