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Interview with James May, Air Transport Assc. of America - 2003-04-22


VOA-TV’s David Borgida speaks with James May, the President and CEO of the Air Transport Association of America. Mr. May discusses the currently troubled state of the airline industry.

MR. BORGIDA
And here to help us sort all this out, James May, President and Chief Executive Officer of the Air Transport Association of America. It is the nation's oldest and largest airline trade association.

Mr. May, thanks for joining us.

MR. MAY
David, glad to be here.

MR. BORGIDA
A busy time for you, as we all know. Tell us a little bit about, in your view, the state of the airline industry, buffeted by winds of change and terrorism and everything else we've just talked about.

MR. MAY
We have termed the condition we are in the perfect economic storm for this industry. We have not only the continuing fallout from 9/11, the hostilities in Iraq have had a devastating impact on our business, and now we add SARS into the mix. This was an industry that was projected to lose $6.7 billion this year. That follows an $18 billion two-year loss. Huge debt loads. The war will probably add another 4-plus billion dollars, maybe more because of SARS, to our load. And when you get to the end of the day, that's a very difficult environment in which to operate.

We've got carriers that are in Chapter 11 and others that may well head in that direction.

MR. BORGIDA
Now, as we mentioned, I guess the last line in our report a second or two ago, we asked the rhetorical question When will this downturn bottom out? Is there any way for you and the folks you work with to assess when this may end and when it may perk up a little bit?

MR. MAY
When we look back at history, the 1990-91 time frame for the first Gulf War, we know that, for a 43-day war, we had almost four years of economic tough times. We had seven carriers that went into Chapter 11 at that period of time. Only a couple have emerged successfully. So, we can't predict that it's going to be six months or a year or a year and a half. What we can say is experience tells us it will be a long, slow recovery.

MR. BORGIDA
These are real people we're talking about, of course. Layoffs, people losing their jobs.

MR. MAY
Hundreds of thousands.

MR. BORGIDA
And it's not the kind of industry one would think, unfortunately, where someone could be let go and immediately find something the next week. These are some specialized skills, aren't they? Where do a lot of people go for help, and how do they make their way in this troubled time?

MR. MAY
The good news is that many of the skills are very transferable, like the mechanics. The bad news is that many of the skills are very much not transferable, like the pilots. And that makes for a difficult environment.

What we have to hope for is a positive, strong rebound to the economy. We have to hope that there will be a quick recovery in terms of the Atlantic routes in particular, and the Pacific routes as a result of SARS, and then domestically. People need to get back flying. The great news is that we have posted the safest year in flying in the history of the airlines industry, and it's a terrific time to get out and fly.

MR. BORGIDA
That is great news for consumers.

Finally, Mr. May, in terms of your relationships with members of Congress, what can you do in this time to enhance your own reputation as an industry to keep your industry afloat? Is there something you can do that can improve things?

MR. MAY
I think what we do is continue to communicate with Congress on a regular basis, let them know what the story is about our industry, what our traffic patterns are like, and continue to do the best we can.

MR. BORGIDA
James May, the President and Chief Executive Officer of the Air Transport Association of America, with a sense of what it's like to be in the middle of that so-called perfect storm you referred to a moment ago. Thanks for being with us. We appreciate it.

MR. MAY
Thanks for allowing me to come by.

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