This article from NYTimes.com has been sent to you by psa188@xxxxxxxxx Republican Plan to Aid Airlines Is Below Request March 27, 2003 By EDMUND L. ANDREWS WASHINGTON, March 26 - Senate Republican leaders voiced support today for providing as much as $3 billion in aid to the nation's airlines, far less than what the industry says it needs to offset the effect of the war in Iraq. Republican leaders cautioned that the details were still in flux. But they said the package would probably include an extension of war-risk insurance and some compensation for the costs from heightened security requirements. The assistance would not include money to compensate airlines for the steep drop in passenger totals, down 10 percent last week alone, nor would it offer much, if any, money to offset higher fuel prices. Airline executives have asked the government to pay up to $4 billion to cover new security requirements and are seeking additional relief from security fees and taxes. Senator Kay Bailey Hutchison of Texas said the package could be worth $1.5 billion to $3 billion. Senator Ted Stevens of Alaska, chairman of the Senate Appropriations Committee, said the measures would be included in legislation to provide about $75 billion for costs related to the war in Iraq. "Yes, we will have something, I believe," Mr. Stevens said after a meeting of Republican leaders this afternoon. The Senate majority leader, Bill Frist of Tennessee, said the Senate was likely to include help "in some shape or form" but insisted that the amount had not been determined. It is unclear how much relief the added money would provide for the airlines. The Air Transport Association, the industry's main trade group, said today that passenger traffic dropped 10 percent last week and that advance bookings for flights in the next two to three months have plunged 20 percent. International bookings have dropped 40 percent, the association said. "This is a direct consequence of the war," said James May, president of the airline association. "If this were a hurricane, the federal government would have declared a state of emergency." The association notes that in addition to an estimated $4 billion in costs from heightened security, the price of jet fuel has doubled. Northwest Airlines has announced plans to eliminate 4,900 jobs, and Delta Air Lines plans to place at least 1,000 people on voluntary leave. United Airlines and US Airways are already in bankruptcy proceedings, and American Airlines has begun to seek financing in case it is forced to seek protection from its creditors. But many Republican lawmakers are reluctant to provide anything in the way of a bailout of the airlines, and the Bush administration is even more reluctant. Critics of the airline industry, including people in the administration, contend that the industry's problems originated well before the war with Iraq and even before the terrorist attacks on Sept. 11, 2001. These critics argue that the industry has failed to reduce its own overcapacity and that weak airlines need to be consolidated. President Bush conspicuously omitted any money for the airline industry in his request this week for $74.5 billion to cover costs of the war against Iraq. Today, White House officials remained aloof but strongly suggested that they would accept a modest package along the lines outlined by Republican lawmakers. "The administration is listening to Congressional proposals on airline assistance," said Trent Duffy, spokesman for the White House Office of Management and Budget. According to one Republican staff member, lawmakers who met with Dr. Frist this afternoon envisioned providing about $600 million for a one-year extension of special war-risk insurance, which is set to expire this summer. Also envisioned was several hundred million dollars to cover costs of security measures required by the federal government - fortified cockpit doors, the cost of armed sky marshals aboard aircraft and more intense screening systems. Lawmakers were also discussing some form of tax relief, like a temporary waiver of fuel taxes, or relief from certain security fees. Some Democrats are pushing for much more generous assistance to the industry. Representative Steny H. Hoyer of Maryland, the Democratic whip, said he would support as much as $9 billion in aid - about what industry officials have been seeking. But House Republicans are leaning in the same direction as Senate Republicans. Representative Don Young, Republican of Alaska and chairman of the House Transportation Committee, is focusing on issues like war-insurance security costs in a package that might add up to about $2 billion or more in help. http://www.nytimes.com/2003/03/27/business/27RELI.html?ex=1049793651&ei=1&en=6bbe64113114ed28 HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@xxxxxxxxxxx or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@xxxxxxxxxxxx Copyright 2003 The New York Times Company