Bush administration officials met with heads of American airlines Tuesday to discuss the economic impact of last week's terrorist attacks. The White House is asking Congress to approve emergency funding for the struggling aviation industry.
Airline officials are looking for more than $20 billion worth of financial assistance from the U.S. government to offset huge losses following last week's attacks. Airline stocks were off sharply when trading resumed Monday, down an average of 40 percent.
Transportation Secretary Norman Mineta said the Bush administration will not allow America's aviation industry to collapse.
"Today we are talking about the safety and the security and the stability of an industry," Secretary Mineta said. "Not of one or two or three or four companies, but an entire industry."
U.S. Airways, the nation's sixth largest carrier, said it is cutting its flight capacity by one-quarter and laying off 11,000 employees. Midway Airlines has already folded. Delta Airlines says its passenger traffic has been cut in half. Delta Chairman Leo Mullin was among the airline executives who met with Secretary Mineta at the White House.
"There is no question that this industry has suffered enormous financial damage via this terrible situation," he said. "In the last three of the four days of last week, we had almost no revenue. We would anticipate that in the next few days, revenue would probably be operating at no more than 40 to 50 percent of normal. With the heavy fixed costs in this industry, there is no way in the long term that our industry could survive with those levels."
Economists say U.S. airlines could be losing as much as $300 million a day while still having to pay fixed operating costs including fuel and liability insurance. Mr. Mullin says the industry needs help quickly.
"We are in very urgent need of a financial infusion very, very quickly, and we are very positive in terms of what we hear back from the administration and our reactions from the Congress that that will be forthcoming very quickly," Mr. Mullin said.
Secretary Mineta is meeting with legislators to push the Administration's bail-out package which he says will address both the short term cash crisis and long term costs of improving security. An airline plan circulated in Congress includes an immediate $5 million cash grant and a proposal allowing airlines to keep $7 billion worth of taxes due the federal government.