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CNN Live At Daybreak
Financial Crisis Facing Airline Industry
Aired March 12, 2003 - 05:53 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.
FREDRICKA WHITFIELD, CNN ANCHOR: Now to the financial crisis facing the airline industry. Today, thousands of union members plan to picket across the country at several major American airline hub cities, including Chicago, Miami and New York. They're trying to save the ailing airline from possible bankruptcy and shine the spotlight on the beleaguered industry as a whole. An airline industry already teetering on the edge of bankruptcy may be pushed over the edge by a war in Iraq.
CNN's Patty Davis looks at what it might take to pull the industry back from the brink.
PATTY DAVIS, CNN CORRESPONDENT (voice-over): Virginia Strand says she's traveling more than ever these days for her job at Fordham University. But if the U.S. goes to war with Iraq...
VIRGINIA STRAND, AIR TRAVELER: I probably will cut back air travel. You know, I would either probably go via another means or not travel.
DAVIS (on camera): Why?
STRAND: Because I think I'd be more nervous.
DAVIS (voice-over): That's just what the airline industry is worried will happen if there's war, fewer passengers along with spiking fuel prices it says could send many in the troubled industry over the edge.
JAMES MAY, AIR TRANSPORT ASSOCIATION: We are very concerned that given the very precarious financial condition this industry is in today, we could see a number of carriers go bankrupt.
DAVIS: Analysts say American Airlines is in one of the most precarious positions. If there's war, the Air Transport Association warns, airlines would most likely lose $10.7 billion this year. Airlines say they'd be forced to cut 70,000 jobs and cut fares to bring passengers back. And they'd also likely slash air service to many small and medium cities.
The airlines have been lobbying the White House and Congress to give them a tax-free holiday amounting to as much as $10 billion. Key members of Congress say they may be willing to give some relief to the ailing industry.
SEN. THOMAS DASCHLE (D-SD), SENATE MAJORITY LEADER: We know what a devastating consequence 9/11 had on airline business and I would suspect that a war could have similar consequences this time.
SEN. KAY BAILEY HUTCHINSON (R), TEXAS: I think you could make the case that a short moratorium on gasoline taxes would be warranted in a real crux time.
DAVIS (on camera): Congress gave the airlines a $5 billion cash infusion after the September 11 terror attacks. In order to get more help, some in Congress say they must be convinced the airlines have done all they can on their own to fix their financial problems.
Patty Davis, CNN, at Reagan National Airport.
(END VIDEOTAPE)
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 March 12, 2003 - 05:53 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: Now to the financial crisis facing the airline industry. Today, thousands of union members plan to picket across the country at several major American airline hub cities, including Chicago, Miami and New York. They're trying to save the ailing airline from possible bankruptcy and shine the spotlight on the beleaguered industry as a whole. An airline industry already teetering on the edge of bankruptcy may be pushed over the edge by a war in Iraq.
CNN's Patty Davis looks at what it might take to pull the industry back from the brink.
PATTY DAVIS, CNN CORRESPONDENT (voice-over): Virginia Strand says she's traveling more than ever these days for her job at Fordham University. But if the U.S. goes to war with Iraq...
VIRGINIA STRAND, AIR TRAVELER: I probably will cut back air travel. You know, I would either probably go via another means or not travel.
DAVIS (on camera): Why?
STRAND: Because I think I'd be more nervous.
DAVIS (voice-over): That's just what the airline industry is worried will happen if there's war, fewer passengers along with spiking fuel prices it says could send many in the troubled industry over the edge.
JAMES MAY, AIR TRANSPORT ASSOCIATION: We are very concerned that given the very precarious financial condition this industry is in today, we could see a number of carriers go bankrupt.
DAVIS: Analysts say American Airlines is in one of the most precarious positions. If there's war, the Air Transport Association warns, airlines would most likely lose $10.7 billion this year. Airlines say they'd be forced to cut 70,000 jobs and cut fares to bring passengers back. And they'd also likely slash air service to many small and medium cities.
The airlines have been lobbying the White House and Congress to give them a tax-free holiday amounting to as much as $10 billion. Key members of Congress say they may be willing to give some relief to the ailing industry.
SEN. THOMAS DASCHLE (D-SD), SENATE MAJORITY LEADER: We know what a devastating consequence 9/11 had on airline business and I would suspect that a war could have similar consequences this time.
SEN. KAY BAILEY HUTCHINSON (R), TEXAS: I think you could make the case that a short moratorium on gasoline taxes would be warranted in a real crux time.
DAVIS (on camera): Congress gave the airlines a $5 billion cash infusion after the September 11 terror attacks. In order to get more help, some in Congress say they must be convinced the airlines have done all they can on their own to fix their financial problems.
Patty Davis, CNN, at Reagan National Airport.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
