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09/23 17:19

U.S. Airlines Request Tax, Cash and Insurance Aid (Update1)

By John Hughes

Washington, Sept. 23 (Bloomberg) -- U.S. airline chief executive officers will tell Congress tomorrow they need reduced taxes, cash assistance and low-cost government insurance to stem record losses and avoid bankruptcy.

The carriers want the U.S. government to hold down airport security fees, give airlines $160 million to help pay for replacing cockpit doors and to offer war-risk insurance at below- market cost for another year, said Michael Wascom, a spokesman for the Air Transport Association industry trade group.

``We're experiencing an unprecedented financial crisis and further bankruptcies are a real threat,'' Wascom said in an e- mail. Chief executive officers Donald Carty of AMR Corp.'s American Airlines, Leo Mullin of Delta Air Lines Inc., Richard Anderson of Northwest Airlines Corp. and Joe Leonard of AirTran Holdings Inc. are scheduled to testify before the House aviation subcommittee.

U.S. airlines have lost $9.7 billion in the year since the Sept. 11 attacks and losses are forecast to exceed $5 billion this year because air travel and fares declined. US Airways Group Inc., the seventh-largest U.S. carrier, sought bankruptcy protection last month and UAL Corp.'s United Airlines said it may be next.

Airlines want the government to suspend fuel excise taxes and other taxes and fees in the event the U.S. becomes involved in a military conflict with Iraq, Wascom said. ``If military conflict arises, the price of jet fuel is going to skyrocket,'' Wascom said in an interview.

More Aid

The air carriers are lobbying for more aid from Congress a year after lawmakers approved $5 billion in cash aid and $10 billion in loan guarantees. The House Transportation and Infrastructure Committee's aviation subcommittee is holding the hearing on the financial condition of the aviation industry.

Airlines have complained for months about what they call high taxes and fees, including a security charge of as much as $10 per round-trip ticket added after the attacks. ``We follow closely behind alcohol and cigarettes'' with a tax rate of almost 25 percent on a $200 round-trip ticket, said Kurt Ebenhoch, a spokesman for Northwest's Anderson.

Separate from fees, airlines so far are paying at a rate of only $300 million a year to help cover the government's cost of security. The Department of Transportation wants to collect $750 million a year and has asked Congress for legislation to require carriers to pay that amount.

US Airways Chief Executive Officer David Siegel told reporters last week that the government should pay the full amount. ``We're already overtaxed,'' he said. ``The government should pick up the cost, not the airlines and not the traveling public.''

The airlines saved about $700 million in the first year of a program created 11 days after the terrorist attacks that lets airlines buy subsidized war-risk insurance coverage from the government. The Department of Transportation last month extended the program at least until Oct. 16.

The Senate Commerce, Science and Transportation Committee voted last week to extend the program another nine months.


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These stupid, stupid fucks....I wish I could get 5 minutes with these people....Before Sept. 11 they hire shit faced security at the nations airports....Terrorists slip by....Attack America...And now these pricks want more money for security....There are not enough words to describe how stupid these people are....

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