2003-03-29 / Community

Gregory Meeks To Congress: Bail Out The Failing Airline Industry

Gregory Meeks To Congress: Bail Out The Failing Airline Industry

Local Congressman Gregory W. Meeks and Texas Congressman Pete Sessions have announced legislation to provide temporary relief for U.S. airlines.

HR 1380, The Travel Related Industries Protection Act (TRIPS) of 2003, a.k.a., the Sessions-Meeks bill, is an honest effort to save commercial aviation from bankruptcy by suspending the federal excise tax it pays on fuel for two years. The cumulative impact of lower revenues, fewer passengers, and increased costs have brought all but a handful of our domestic commercial aviation enterprises to the brink of bankruptcy, and have already claimed two commercial carriers (US Airways and United Airlines).

"The war with Iraq will devastate U.S. air transportation, adding more negative pressure on an already weakened airline industry," said Gregory W. Meeks whose district includes John F. Kennedy International Airport. "According to the Air Transport Association, even a war of limited duration today will result in additional losses of $4 billion, on top of the $6.7 billion already anticipated in 2003."

"The TRIP Act of 2003 is an honest effort to help save the commercial airline industry. With fewer travelers and higher security costs following the September 11, 2001 terrorist attacks, two airlines have already declared bankruptcy and others are on the brink.  In light of the hostilities in Iraq, the airline industry could suffer more in the upcoming months," said Sessions.

"American Airlines joins others in the airlines industry in supporting HR 1380, which will provide a two-year suspension on commercial aviation fuel excise taxes," said American Airlines CEO Don Carty. "Representatives Sessions and Meeks and the many co-sponsors of the legislation are to be commended for their support of this measure to aid the industry."

The bill seeks a modest and real solution to the current threat of commercial aviation bankruptcy and attendant travel related industry unemployment that we believe the Congress has the ways and the means to enact into law. The bill proposes a temporary, two-year suspension of the 4.3 cents-per-gallon commercial aviation fuel excise tax that commercial aviation pays to the Aviation Trust Fund. 

This two-year suspension will allow these enterprises to use $600 million in aviation trust fund tax dollars annually to trim operating costs and avoid making the tough decisions that are leading to more worker reductions.  The TRIP Act does not suspend the 1/10 of 1 cent per gallon tax that commercial aviation pays to the Leaking Underground Storage Tank (LUST) Trust Fund.

The cost of commercial aviation fuel has risen from 57 cents per gallon in February 2002 to $1.20 per gallon last month.  Fuel constitutes between 10 and 15 percent of commercial aviation’s cost structure, Meeks said.  Every one-penny increase in the cost of a gallon of fuel costs the commercial aviation industry $180 million annually.  This is a real solution that has a good chance of keeping our commercial aviation employers from making the tough decision to continue laying off workers in order to stay out of bankruptcy."

"I am very concerned about the economic health of this industry.  Aviation is the economic engine for my district.  One airline (United) is already in bankruptcy and Kennedy’s largest carrier, American, is near  bankruptcy.  Meanwhile, my district still has not fully recovered from the bankruptcies of Eastern Airlines and Pan American World Airways in the early ‘90s.  Many of my constituents are employed by these airlines.  Their livelihoods will depend on the future stability of these carriers." Meeks concluded.

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