By Suzanne Sprague
DALLAS – Suzanne Sprague, KERA 90.1 Reporter: Three of the nation's major airlines are based in Texas: American, Continental and Southwest. None knows for sure how much money it can expect to receive as part of the federal aviation bailout. But industry analysts are guessing as much as $1.5 billion in initial cash aid could go to these three carriers. Michael Wascom is the vice president for communications at the Air Transport Association of America, which lobbies on behalf of the airline industry.
Michael Wascom, Vice President of Communications, Air Transport Association of America: Enactment of the airline stabilization package on Friday evening has, in the short term, alleviated the various concerns going into this week that several individual airlines would have filed for bankruptcy and liquidated.
Sprague: Houston-based Continental, which lost $90 million during the four-day shutdown, was among those carriers that said they couldn't survive without federal assistance. But even $15 billion in direct aid and loan guarantees to U.S. airlines can't save nearly 100,000 aviation jobs. American has cut 20,000; Continental, 12,000. Southwest hasn't furloughed workers yet, but pilots are being told to prepare for pay cuts across the board if passenger loads don't increase. Still, Ron Luvas, a spokesman for the Air Line Pilots Association, says it's premature to comment on the need for layoffs in light of the bailout.
Ron Luvas, Spokesman, Air Line Pilots Association: I just don't know what the final numbers in terms of furloughs will be. It's up to them to decide, because they know economically what they're going to have; but I think at this point it's probably a non-hurt situation. I think it will help in the long run.
Sprague: The AFL-CIO and the Teamsters have criticized Congress for not forcing the airlines to set aside money to help laid off workers. And, privately, some of those workers question if the nation's carriers are using the crisis to justify unpopular cutbacks that were in the works before the September 11th attacks. And American and United's biggest possible expense - lawsuits - was addressed by the stabilization bill. Dallas aviation attorney Kent Krause.
Kent Krause, Dallas aviation attorney: Because the limitation has been placed that their only exposure is up to the limits of their insurance coverage, it really should not be a tax or a burden on the airlines themselves. Frankly, they've kind of been cut free of that aspect.
Sprague: But the Air Transport Association's Michael Wascom scoffs at the idea that carriers may be using the bailout to their timely advantage. He says most airlines already had a financial plan in place to cope with the economic downturn before September 11th.
Wascom: The package enacted last Friday evening was solely designed to stabilize the industry for the direct losses incurred during the four-day shutdown and as the system was returned to normal. Nothing more. Nothing less.
Sprague: But something more may very well be needed by the nation's carriers. In testimony before Congress, experts said ongoing industry losses stemming from the terrorist attacks could top $24 billion by summer. American Airlines is expected to announce corporate layoffs this week. And Southwest could still scale back operations as executives try to navigate the uncharted financial skies ahead. For KERA 90.1, I'm Suzanne Sprague.