Air Line Pilot, January 2003

President's Forum: Paying the Security Bill

Although the U.S. airline industry has become a national disaster area since the 9/11 terrorist attacks and the subsequent "double dip" economic recession, the federal government has yet to adequately provide the financial relief required to keep airlines alive. Instead, U.S. airlines face increased taxes, which cannot, in the current market, be passed on to consumers, and increased costs for the safety and security improvements that Congress mandated as part of the U.S. war on terrorism.

The Air Transport Association estimates that airlines will likely have to spend more than $10 billion to install the planned security changes during the next year alone and that 70 percent of the airlines’ pretax losses in 2002 can be attributed in some way to the 9/11 attacks. Most airlines have been forced to borrow massive amounts of money just to continue to operate.

The burden of paying for necessary security improvements must be lifted from the backs of the U.S. airline industry and be borne as part of the federal budget. If we are truly in a deadly war against a globally mobilized enemy, the federal government must assume responsibility for the costs of such warfare.

The bill to approve creation of the massive new Department of Homeland Security, however, does not include appropriations to pay for the security programs that Congress and the Administration have accepted—programs that ALPA members strongly approved and helped to create.

And nowhere in the bill is a proposal to charge user fees to cover the costs.

People who use bridges, streets, and subways, who attend sporting events or visit museums, or who work in ports, office buildings, and government agencies—all those areas now threatened with terrorist attacks—are not facing a "user fee" for security improvements in those facilities.

ATA estimates the cost to airlines for increased security, so far, has been more than $4 billion. Even if the federal government were to reimburse that amount, airlines could not return to profitability.

Such a payment, however, might allow airlines the opportunity to restructure without putting hundreds of thousands of employees out of work or closing their doors for good. ATA President and CEO Carol Hallett, in her final speech to Washington D.C.’s Aero Club, recently warned that the current airline revenue picture is so bad and the current tax burden is so onerous that we may face a total implosion of the U.S. airline industry. She said, "Failure to fix the root causes of the meltdown may necessitate nationalization of the [airline] industry."

Congress recently passed a $190 billion farm bill to help that industry combat unfair trade practices in agriculture over the next 10 years, and the federal government had no trouble finding funds and passing that relief. For tragic events, such as hurricanes, floods, fires, or drought, the President declares an area a national disaster and, through FEMA, federal relief freely flows to communities and individual victims. The U.S. government has never been as stingy in its response to farmers or other disaster victims as it has been to the airlines.

The airline industry remains a victim of the war on terrorism, but is being asked to pay for its own short-term, emergency relief and for the long-term changes the government mandates to thwart any future attacks. This is wrong and shortsighted and will have dire long-term effects on both the airline industry and the United States. Current taxes on airlines are double those imposed on cigarettes—taxes that are supposedly designed to reduce consumption. No wonder, then, that airline passengers are seeking alternative forms of transportation.

So where are airlines finding relief? They are going to their employees for wage and work-rule concessions. Nearly $10 billion has been ripped from the paychecks of United and US Airways workers alone. This is 100 percent more than the U.S. government has doled out in emergency grants to airlines.

The bulk of the $10 billion in loan guarantees has yet to materialize, but is dangled over the heads of airline employee groups and management as a carrot to motivate additional cuts in labor costs.

ALPA members and the airlines that employ us are very willing to participate in a massive mobilization to defend the United States against global terrorism. We were, after all, the instrument of terror for the initial attack. Our full participation is a matter of survival.

We can’t survive, however, if our own government savagely plunders airline revenue in an attempt to shift the burden of responsibility for national defense.

s/ Duane E. Woerth