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CNN Live Today

Another Bailout for Airlines?

Aired September 23, 2002 - 12:32   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.


KYRA PHILLIPS, CNN ANCHOR: For more on the air travel outlook now, we turn to airline passenger advocate Terry Trippler in Minneapolis.
Hi, Terry.

TERRY TRIPPLER, TERRYTRIPPLER.COM: Hello.

PHILLIPS: All right, let's talk about why the revenue is not coming back. Is it security? Are people not flying? Is it fuel costs, all of the above?

TRIPPLER: It's sort of all of the above. I think the main reason, though, Kyra, is the business travelers. They were generally the people paying the top dollar, with last minute walk-ups. They have not come back in any of the numbers that the airline needed them to come back in order to turn a profit. And many of those have come back, many of them are buying the lower, non-refundable airfares that normally only leisure travelers buy. So the airlines have found themselves in quite a mess here, because they are not getting that high fare to subsidize those leisure fares.

PHILLIPS: Is there anyway to get those type of people back, any type of incentives? I mean, they are talking away all of our incentives now?

TRIPPLER: Yes, they are. It seems like the price is going up and the service keeps getting worse. They are trying to add extra miles, give people bonus miles et cetera, but what turns out to be is the business travelers is just not coming back in those numbers and paying that type of airfare. The airlines are trying anything they can think of, and it hasn't worked yet. They're going to have to come up with a better idea.

PHILLIPS: So what happened to all the direct cash payments from the earlier bailout? Where did all that money go?

TRIPPLER: Well, it's just gone. The airlines have been blowing money at a million to $2 billion a day, some of them. It's been very, very difficult for them to get a grasp of their expenses. Now, some of them are doing pretty well. They are getting a hold of expenses. They are cutting the costs operation, et cetera, but they are not quite there yet. And any type of a slippage or a recession or deepening of the recession and the airlines are going to be in serious trouble.

PHILLIPS: You say they are blowing the money. How are they blowing the money? I know airlines are buying new jets. Even they are saying they need the money, they need government aide, but they are out there buying jets.

TRIPPLER: It's just basically the general operation, the labor costs, the fuel costs, the daily costs that an airline has. Yes, some of them are buying new jets, and a lot are now going to smaller jets, because they realize that they can operate those in a more efficient manner. Some airlines are realizing they have get rid of some of the fuel-hog jets and get some more fuel-efficient ones. That all plays into the equation of getting them back to profitability, and it's been a tough road for them right now.

PHILLIPS: So what about AirTran, Southwest, JetBlue? These airlines are doing well. I know AirTran is even hiring and increasing their flights.

TRIPPLER: Yes, the low-cost, low-fare airlines are doing very well right now. They have always had a handle on cost. From the very beginning, their mindset was a low-cost, low-fare airline. They are many steps ahead of these higher priced airline, higher cost airlines. But we have to look at these airlines and realize, they're the ones that built this transportation system. We have to give them some credit for that. They have invested over the years to get to where we are today.

Now we have a bloated bureaucracy in some of those airlines that has to learn a new method of doing business, a new way of doing business. It's a little difficult for them right now, but I do believe they'll get there.

PHILLIPS: So what if government assumes more of the cost, like for security insurance. I know that's killing the airlines right now.

TRIPPLER: The insurance is hurting them a lot. Security is hurting them a lot, and the government, I think, is going to have to assume some more costs. As much as I don't like it, and I don't think anybody likes it, my concern is for the economy of the country right now, and so many people whose lives depend directly or indirectly on air transportation,

Let's keep the airlines going now. Let's make sure they're healthy or at least in the foreseeable future. Once things settle down, we can take a look at how they're operating and maybe suggest some changes, but right now, we've got to keep them going.

PHILLIPS: So if this government aide, doesn't come through, we could see a lot of airlines filing chapter 11, right, and that, of course, would really hit the economy in a poor way?

TRIPPLER: It really would. We would -- could see the filing of chapter 11. You know, when someone files chapter 11, there is always a chance the bankruptcy court, the bankruptcy judge, could force them into a complete liquidation, and if we look at an airline like United, suppose they would be forced into liquidation, there is no way the other airlines could pick up the slack of what United, the whole United would leave and not harm the economy. We can't afford that right.

PHILLIPS: Terry Trippler, thanks so much.

TRIPPLER: Thank you.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com







Aired September 23, 2002 - 12:32   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: For more on the air travel outlook now, we turn to airline passenger advocate Terry Trippler in Minneapolis.
Hi, Terry.

TERRY TRIPPLER, TERRYTRIPPLER.COM: Hello.

PHILLIPS: All right, let's talk about why the revenue is not coming back. Is it security? Are people not flying? Is it fuel costs, all of the above?

TRIPPLER: It's sort of all of the above. I think the main reason, though, Kyra, is the business travelers. They were generally the people paying the top dollar, with last minute walk-ups. They have not come back in any of the numbers that the airline needed them to come back in order to turn a profit. And many of those have come back, many of them are buying the lower, non-refundable airfares that normally only leisure travelers buy. So the airlines have found themselves in quite a mess here, because they are not getting that high fare to subsidize those leisure fares.

PHILLIPS: Is there anyway to get those type of people back, any type of incentives? I mean, they are talking away all of our incentives now?

TRIPPLER: Yes, they are. It seems like the price is going up and the service keeps getting worse. They are trying to add extra miles, give people bonus miles et cetera, but what turns out to be is the business travelers is just not coming back in those numbers and paying that type of airfare. The airlines are trying anything they can think of, and it hasn't worked yet. They're going to have to come up with a better idea.

PHILLIPS: So what happened to all the direct cash payments from the earlier bailout? Where did all that money go?

TRIPPLER: Well, it's just gone. The airlines have been blowing money at a million to $2 billion a day, some of them. It's been very, very difficult for them to get a grasp of their expenses. Now, some of them are doing pretty well. They are getting a hold of expenses. They are cutting the costs operation, et cetera, but they are not quite there yet. And any type of a slippage or a recession or deepening of the recession and the airlines are going to be in serious trouble.

PHILLIPS: You say they are blowing the money. How are they blowing the money? I know airlines are buying new jets. Even they are saying they need the money, they need government aide, but they are out there buying jets.

TRIPPLER: It's just basically the general operation, the labor costs, the fuel costs, the daily costs that an airline has. Yes, some of them are buying new jets, and a lot are now going to smaller jets, because they realize that they can operate those in a more efficient manner. Some airlines are realizing they have get rid of some of the fuel-hog jets and get some more fuel-efficient ones. That all plays into the equation of getting them back to profitability, and it's been a tough road for them right now.

PHILLIPS: So what about AirTran, Southwest, JetBlue? These airlines are doing well. I know AirTran is even hiring and increasing their flights.

TRIPPLER: Yes, the low-cost, low-fare airlines are doing very well right now. They have always had a handle on cost. From the very beginning, their mindset was a low-cost, low-fare airline. They are many steps ahead of these higher priced airline, higher cost airlines. But we have to look at these airlines and realize, they're the ones that built this transportation system. We have to give them some credit for that. They have invested over the years to get to where we are today.

Now we have a bloated bureaucracy in some of those airlines that has to learn a new method of doing business, a new way of doing business. It's a little difficult for them right now, but I do believe they'll get there.

PHILLIPS: So what if government assumes more of the cost, like for security insurance. I know that's killing the airlines right now.

TRIPPLER: The insurance is hurting them a lot. Security is hurting them a lot, and the government, I think, is going to have to assume some more costs. As much as I don't like it, and I don't think anybody likes it, my concern is for the economy of the country right now, and so many people whose lives depend directly or indirectly on air transportation,

Let's keep the airlines going now. Let's make sure they're healthy or at least in the foreseeable future. Once things settle down, we can take a look at how they're operating and maybe suggest some changes, but right now, we've got to keep them going.

PHILLIPS: So if this government aide, doesn't come through, we could see a lot of airlines filing chapter 11, right, and that, of course, would really hit the economy in a poor way?

TRIPPLER: It really would. We would -- could see the filing of chapter 11. You know, when someone files chapter 11, there is always a chance the bankruptcy court, the bankruptcy judge, could force them into a complete liquidation, and if we look at an airline like United, suppose they would be forced into liquidation, there is no way the other airlines could pick up the slack of what United, the whole United would leave and not harm the economy. We can't afford that right.

PHILLIPS: Terry Trippler, thanks so much.

TRIPPLER: Thank you.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com