Senate GOP leaders
OK $2.8 billion
airline plan

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By Leslie Miller
Associated Press

WASHINGTON >> Senate Republicans agreed yesterday 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 measures.

It also would give the 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 yesterday.

White House officials have said President Bush opposes a major bailout plan because he believes market forces should be allowed to determine which airlines survive.