Monday, September 24, 2001

Remember 9-11-01

Relief provided
for airline industry

The issue: Congress has approved
$15 billion intended to keep the airline
industry aloft after the terrorist attack.

CONGRESS had little choice but to commit billions of dollars to prevent the collapse of the nation's aviation in the aftermath of the Sept. 11 terrorist attack. Despite the urgency, safeguards were included and other measures may be added to assist employees laid off because of the blow to the industry. The financial relief is of special importance to Hawaii because airlines are the infrastructure of the tourist industry.

Congress acted with near-unanimity in approving $5 billion to compensate for the losses resulting directly from the attacks. The grants will be distributed on the basis of a carrier's available seat-miles. That should qualify Aloha and Hawaiian airlines for some assistance, with larger amounts going to nationwide airlines that bring the bulk of Hawaii's visitors from the mainland. It also provides for $10 billion in loan guarantees to help airlines deal with their cash squeeze. At least three major carriers would have faced bankruptcy if help had not been provided.

"There is a need to have really functioning lines of credit," said House Majority Leader Dick Armey, referring to the loan guarantees. "It reduces the sense of risk and uncertainty for those people who provide capital."

The measure extends the existing War Act, which protects airlines from liability during wartime overseas flights, to cover domestic flights and terrorist acts. It does not help American and United airlines deal with lawsuits claiming death and property damage stemming from the attacks on the World Trade Center and the Pentagon.

Insurers have raised airline insurance premiums by $1 billion, partly because of New York's blame-laying laws, which could be applied to the World Trade Center devastation. A proposal to consolidate the New York cases into federal court, barring punitive damages and limiting lawyer fees to 10 percent of the amount recovered -- 33 percent is common -- is reportedly under discussion in Congress. Some level of legal protection should be provided to cover this unusual circumstance.

The legislation forbids executives of airlines receiving the assistance from getting raises if they are salaried at more than $300,000. It does not help airline employees facing job losses. However, Senate leaders have agreed to consider a separate bill that would provide up to $3.75 billion in health insurance, unemployment benefits and job training for displaced workers. Any such proposal limited to airline job losses would be unfair to victims of related economic setbacks.

The working stiff
needs help, too

The issue: The state and federal
governments consider financial
aid for ailing industries.

As the state government attempts to bolster Hawaii's wounded tourist industry, it is appropriate that it also help those on the bottom of the economic tier, the workers.

Governor Cayetano has prudently included private and public unions in his discussions about how to keep the state from a downward financial spiral after the terrorist attacks. "If we are going to provide subsidies and help to companies, we must make sure that those businesses do everything they can to take care of their employees," he said.

Layoffs and reduced work hours have been announced by local airlines and other companies in the industry and more job cuts are sure to come as the number of visitors dwindles. Cayetano, who said workers should not have to bear the brunt of the economic crisis, properly recognized that government aid should also go to the rank and file because a drop in consumer spending would certainly do further harm to Hawaii's financial health.

The governor is considering proposals to stretch unemployment benefits beyond the present six-month limit and to expand eligibility for state-subsidized health insurance. These plans should be adopted to provide the unemployed with a safety net, at least until the tourist industry can begin hiring again.

Congress, meanwhile, should take into account the effects of the airline layoffs on industry workers. The $15 billion relief package for the airlines does not include help for the 100,000 employees facing job losses despite calls from Democratic senators to consider their plight. A separate bill has been proposed to provide $3.75 billion in health insurance, unemployment benefits and training for displaced workers. This measure also deserves approval.

Assisting airline and tourist businesses in these desperate times is crucial. However, lawmakers should not forget the ordinary wage earners and should not abandon them to fend for themselves. Consumer confidence is an important element if we are to repair the state and national economies. Helping hands should be fairly extended to clerks as well as CEOs.

Published by Oahu Publications Inc., a subsidiary of Black Press.

Don Kendall, President

John Flanagan, publisher and editor in chief 529-4748;
Frank Bridgewater, managing editor 529-4791;
Michael Rovner,
assistant managing editor 529-4768;
Lucy Young-Oda, assistant managing editor 529-4762;

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