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America's New War: Transportation Secretary Norm Mineta and Airline Executives Discuss Meeting on Problems of Industry

Aired September 18, 2001 - 12:18   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JUDY WOODRUFF, CNN ANCHOR: U.S. Transporation Secretary Norm Mineta just out of a meeting on the airlines.

(JOINED IN PROGRESS)

NORM MINETA, TRANSPORTATION SECRETARY: ... on Tuesday, September 11th. And by the same token where we had this terrorist, heinous act occur -- and for the first time we had a commercial vehicle being used as a lethal weapon. And so life as we knew it prior to Tuesday has changed forever. And this is especially true in all of the transportation modes.

One of those modes that we have been discussing is specifically the airline industry, where things are vastly different. And yet today we are talking about the safety and the security and the stability of an industry -- not of one or two or three or four companies, but an entire industry. We are now focused on that at the Department of Transportation this Tuesday. The whole administration, President Bush, has been leading this effort, and the whole issue of trying to come up with a package -- not relating to whether this industry is going to be helped, but in terms of the details of what has to be done to ensure the security, the safety, and the stability of the airline industry both passenger and cargo, both major carriers as well as regional carriers as well as general aviation. So all aspects of aviation are being looked at.

I have had constant communication with all sectors of the industry since last Tuesday. That has culminated in a meeting today with Larry Linzy (ph) and with Mitch Daniels (ph) of OMB. And Lary Linzy (ph), of course, being head of domestic policy. And myself with airline executives. And what we have now gotten is the kind of essential data that we need from the aviation industry to now put together a package. And that package will now -- after it's put together, we will then go to the Hill and work with the Republicans and the Democrats and come up with a time table in trying to get this guy as quickly as possible. And hopefully that might be done by the early part in terms of having a package by the early part of this next week.

Now these meetings that we have had have been very good meetings, very positive exchanges. So now our big task is taking the data that we have received from the airline industry and to then scope it out into a legislative package. Let me know introduce to you Leo Mullin, the chairman of the board of Delta Airlines.

LEO MULLIN, CHAIRMAN/CEO, DELTA AIRLINES: Thank you very much, Mr. Secretary.

I want to say that the tragedy of last week certainly affected America in every way. And it is, from the standpoint of the airline industry, lead to perhaps the biggest challenge in our history. On the one hand, within the space of one and a half hours, over 2,000 airplanes were brought down and put in the land safely after the terrible consequences of the incidents of New York.

We then immediately turned with excellent support from the federal government, a joint airline-governmental effort, to remake the security system and aviation in our country over the period of one and a half days. We then went through the immediate training programs associated with that, and brought the whole system back up again, to the point where over 80 percent of the planes are now basically flying in the United States today.

And now with that immediate-term issue behind us, we have to turn to the financial stability of the industry. There is no question that this industry has suffered enormous financial damage, via this terrible situation. In three of the four days of last week, we had almost no revenue. And we would anticipate that in the next few days, revenue would probably be operating at no more than 40-50 percent above normal. And with the heavy fixed cost in this industry, there's no way in the long term that our industry could survive at those levels.

So we have been acting to develop with the administration a transition program wherein we continue to put forward the strengths of the airline industry, such that it does not become a major economic casualty of the war, but, in fact, is able to not only survive, but thrive in performing its fundamental economic role.

I want to thank President Bush, Secretary Mineta, administrator Jane Garvey of the Federal Aviation Administration for their superb leadership during this crisis. We in the aviation industry have had nothing other than excellent support on this, and we're look forward to working with the secretary and with the Congress to fashion a bill within the next few days that will ensure that we are viable, strong and able to perform our fundamental economic role.

Thank you very much.

QUESTION: What kind of response did you get from the White House on that?

MULLIN: We have had an excellent response from the White House on all elements of the package. There's an estimate that it could through possibly the summer of next year, that the financial consequence could amount to that much. Obviously those are based on revenue projections that are very, very uncertain at this time, and we are working on plans with the administration that could in fact yield that much, but perhaps less and we're all hoping it will be less.

QUESTION: You're seeking tax delays, a roll-back of the fuel tax, that sort of thing. Can you give some idea of the kinds of things you're seeking.

MULLIN: We have shared ideas with the administration pertaining to several avenues that could be pursued. I think ultimately it will be a federal government choice as to what is the best method to do it.

We are in very urgent need of a financial infusion very, very quickly, and we're very positive in terms of what we hear back from the administration and our reactions from the Congress that that will be forthcoming very quickly.

(CROSSTALK)

QUESTION: ... a lot of discussions today about war risk insurance and if the industry wants some relief from any liability for (inaudible) people and property on the ground. Can you explain that, what the administration's position might be on that?

MINETA: Well, let me first of all say that it's really too premature to come up with the details of what that package would look like. But as Mr. Mullin has indicated, there are two parts of this. One is the immediately short-term needs of the carriers; and then the long-term needs. And both as they relate to short-term and long-term, we're dealing with safety, security and stability of the industry.

Now, what are some of those elements? You've already mentioned something like liability. There are things like, is insurance available to the air carriers? If it is available, is the cost of it going up? What about fuel cost?

There are a lot of these kinds of details that we have now gotten data from the airlines, and now we have to take that data and try to fashion a legislative package, working with the Republicans and the Democrats in the House and the Senate. And that's something that we are now ready to do. I will be meeting on the Hill later today with the House and Senate members, both Republican and Democrats, on the Appropriations Committee, as well as authorizing committees.

So those kinds of details as to what's the size of the package, what are the elements that are covered, how will the airlines be reimbursed for these, those have not been detailed yet. But the fact that the airline industry across the board -- and I shouldn't just say airline industry -- aviation across the board has been very helpful in their input to us on not only financial stability, but in terms of our work on airport security and airplane security.

QUESTION: Now that you've their data, Mr. Secretary, what was your overall impression of that data?

MINETA: The overall data is there's no question that last Tuesday's events had a tremendous impact on the aviation business in terms of having fixed costs that they have to pay for on a daily basis and no revenues coming in. And so they have some very immediate needs.

Now, what are those costs? Really can't pinpoint them, but I've seen any estimates from $200 to $250 to $300 million a day. And so to the extent that...

BROWN: Transportation Secretary Norm Mineta and airline executives talking about their meeting on the problems of the industry.

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