Airlines look for government to ease burden in the event of war

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Airlines look for government to ease burden in the event of war

NEW YORK (AP) =97 Airline executives worried about the financial fallout of=
=20
military action in Iraq want the government to consider easing the burden=20
several ways, including tax relief and a temporary relaxation of antitrust=
=20
laws. "We need a national transportation plan if we go to war," Continental=
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Airlines' chairman and chief executive, Gordon Bethune, said Thursday at a=
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gathering of tourism and transportation leaders in New York. "The=20
government can't wait until we're all dead and then revive us," said=20
Bethune, who has personally pitched these ideas to members of Congress and=
=20
officials at the Transportation Department.
In the event of war, major carriers want the right to discuss flight=20
schedules with each other =97 something prohibited by antitrust law. By=20
coordinating routes and flight frequencies, carriers can reduce service=20
where demand is low without giving up market share. Executives say it also=
=20
would ensure that adequate service is maintained in smaller markets, where=
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capacity is most likely be cut first. Other proposals on the struggling=20
industry's wish list include a temporary suspension of the $2.50 security=20
tax levied per passenger on each flight, some relief on fuel taxes and the=
=20
release of oil from the Strategic Petroleum Reserve in order to keep fuel=20
prices down.

A Transportation Department spokesman said Thursday that the agency has not=
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taken a position on any of the requests, which have been made by several=20
executives. Earlier in the month, a Bush administration official signaled=20
that lifting the passenger security fee was not likely to happen. U.S.=20
airlines lost billions of dollars in the past two years, despite massive=20
layoffs and reductions in service, and most are not expected to turn a=20
profit in 2003. Executives blame the industry's woes on higher security=20
costs since the Sept. 11 attacks, a significant loss of revenue from=20
business travelers and higher fuel prices.
Two of the largest airlines, United and US Airways, are restructuring in=20
bankruptcy court and analysts lately have raised the possibility that=20
American Airlines =97 which lost a record $3.5 billion in 2002 =97 could be=
=20
next. The industry's lobbying campaign for temporary relief in the event of=
=20
war is an extension of its broader attempt to get financial assistance from=
=20
the government since Sept. 11.  Immediately after the attacks, Congress=20
approved $5 billion in emergency funds for the industry and established a=20
$10 billion loan guarantee program, which has since ended. In November=20
2002, Congress enacted a law to extend government-issued war-risk insurance=
=20
and limit liability against companies for the terrorist attacks. The=20
airlines have been crusading for months for an end to the passenger=20
security fees, arguing that the money has actually come out of the=20
industry's pocket since raising ticket prices is out of the question when=20
business is already slow.


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