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No Promises Made
ARLINGTON (theHub.com) - The financial condition of the commercial airline industry was the topic of a congressional hearing yesterday on Capitol Hill. Six U.S. airline CEOs along with industry experts testified at the House hearing. Airlines are seeking help for the fourth straight year after posting losses of $23.2 billion from 2001 to 2003. Carriers expect losses to exceed $3 billion this year because of fuel and security.
Despite the airlines’ requests for additional federal relief, Congress made no promises for aid. “Congress is not going to underwrite losing airline operations,†said Rep. John Mica (R-Fla.), and House Transportation and Infrastructure aviation subcommittee chairman.
Lehman Brothers Airline Analyst Gary Chase said he expects low-cost airlines to continue to flourish despite rising fuel costs and that legacy carriers would still struggle. “We believe the network airlines must act further to reduce costs and increase flexibility,†Chase said.
One carrier suggested that the government has done enough and should not do anything more to shore up failing carriers. “The government is postponing a day of reckoning for aviation business models that no longer work…We should keep the exit doors open and let inefficient carriers…fail,†said Chairman and CEO AirTran Airways Joseph Leonard. Also participating were Continental Chairman and CEO Gordon Bethune; Northwest CEO Richard Anderson; America West CEO Doug Parker; Frontier President and CEO Jeff Potter; and United Chairman, President, and CEO Glenn Tilton.
Committee Chairman Mica said he would consider a three-year extension of the war-risk program and possible help with security costs. However, he said: “Let me make it clear that Congress is not going to underwrite losing airline operations. Some of our airlines must either reduce their costs dramatically or they will not survive.â€
ARLINGTON (theHub.com) - The financial condition of the commercial airline industry was the topic of a congressional hearing yesterday on Capitol Hill. Six U.S. airline CEOs along with industry experts testified at the House hearing. Airlines are seeking help for the fourth straight year after posting losses of $23.2 billion from 2001 to 2003. Carriers expect losses to exceed $3 billion this year because of fuel and security.
Despite the airlines’ requests for additional federal relief, Congress made no promises for aid. “Congress is not going to underwrite losing airline operations,†said Rep. John Mica (R-Fla.), and House Transportation and Infrastructure aviation subcommittee chairman.
Lehman Brothers Airline Analyst Gary Chase said he expects low-cost airlines to continue to flourish despite rising fuel costs and that legacy carriers would still struggle. “We believe the network airlines must act further to reduce costs and increase flexibility,†Chase said.
One carrier suggested that the government has done enough and should not do anything more to shore up failing carriers. “The government is postponing a day of reckoning for aviation business models that no longer work…We should keep the exit doors open and let inefficient carriers…fail,†said Chairman and CEO AirTran Airways Joseph Leonard. Also participating were Continental Chairman and CEO Gordon Bethune; Northwest CEO Richard Anderson; America West CEO Doug Parker; Frontier President and CEO Jeff Potter; and United Chairman, President, and CEO Glenn Tilton.
Committee Chairman Mica said he would consider a three-year extension of the war-risk program and possible help with security costs. However, he said: “Let me make it clear that Congress is not going to underwrite losing airline operations. Some of our airlines must either reduce their costs dramatically or they will not survive.â€
