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CNN Live At Daybreak

America's New War: Congress Debates Bailout Plan for Airlines

Aired September 19, 2001 - 08:08   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.
PAULA ZAHN, CNN ANCHOR: There has been a tremendous amount of focus on the health of the airline industry at a time when it has been learned that all of the majors collectively lost about $300 million a day when those airlines were grounded in the wake of last Tuesday's attacks.

Congressional leaders, of course, debating a potential bailout plan of the airlines. CNN being told by some of those leaders that they are nearing an agreement on a $15 billion plan. As you may remember if you had your seatbelts on on Monday, those airline stocks tanked on Monday, some of the companies losing -- or the stocks losing 40 percent of its value. Some of those stocks ticked back up on Tuesday.

Let's turn to Kitty Pilgrim now for a broad view of that, but more importantly, an announcement coming from Boeing this morning. More layoffs?

KITTY PILGRIM, CNN CORRESPONDENT: That's right, Paula.

And it's a stunner. Boeing says that they are laying off 20,000 to 30,000 workers -- that's about 20 to 30 percent of their work force, and that's out of the commercial jet unit -- by the end of the year 2002. The head of that unit says in 31 years of designing planes, he never thought of a plane as a weapon. Well, this is the new reality in the aviation industry, and it's also the new financial reality for these companies that have to deal with the slowdown in jet traffic.

Here's what the president and CEO of Boeing had to say about the layoffs.

(BEGIN VIDEO CLIP)

ALAN MULALLY, BOEING: The reason that we're doing it so quickly, after we've evaluated this with the airlines, is that everybody wants to know. Because everybody knows that travel is down; everybody knows the economy is down. And we wanted to let our employees know, we wanted to let all of our partners know, our customers know that we had made this global assessment. This is what we need to do, and we need to move quickly.

(END VIDEO CLIP) PILGRIM: Now, the key phrase is that he consulted with the airline industry and what they expect their reduction to be. Right now, most of the major carriers have a 20 percent reduction in their flying schedule. That's having a direct impact on the number of workers they need. And in fact, we've seen across-the-board layoffs from all of the major carriers, or many of them.

In addition to Boeing's 30,000, we had Continental on Saturday saying they were furloughing 12,000; US Air, 11,000. Sources tell CNN United is on the verge of cuts, maybe up to 20,000. And American officials say they will have layoffs, they just don't have a number yet.

It's a serious situation for the industry, one that requires the attention of Washington. And here's what U.S. Transportation Secretary Mineta had to say about it.

(BEGIN VIDEO CLIP)

NORMAN MINETA, TRANSPORTATION SECRETARY: To the extent that what happened on Tuesday has imposed a direct impact on the airlines, I think there is some recognition that, at least from that perspective, they've got to be made whole.

(END VIDEO CLIP)

PILGRIM: Now, you can see that Washington and the private sector working very much hand in hand, especially on safety measures. And Boeing says that they are actively looking into improved safety measures for the planes and working along with government agencies on that. That's the very latest on the airline industry.

ZAHN: Oh, thanks, Kitty.

And a little bit later on, we're going to try to explore what the impact of this will be on all of you that have to get on planes out there -- thanks.

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