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American Morning
Interview with Janet Libert
Aired September 25, 2002 - 08:17 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.
BILL HEMMER, CNN ANCHOR: It's certainly been a rough ride for America's airline industry. More than a year after 9/11, the major carriers say they're on the brink of financial disaster, fewer passengers and the overwhelming cost of security. Airline executives before Congress on Tuesday saying they're desperate now, in need of more government assistance.
(BEGIN VIDEO CLIP)
DONALD CARTY, CHAIRMAN, AMERICAN AIRLINES: The bottom line, however, is that providing for the security of our nation's citizens and fighting the war on terrorism are national security issues and fundamentally government functions. As such, given that the government determines what structure needs to be in place to secure our nation's airways, it should pay for it.
(END VIDEO CLIP)
HEMMER: That was the word from Capitol Hill. Airlines have been already cutting back on services and the perks and raising some fees in areas, as well. Will passengers now be feeling even more of a pinch and why should the government help out yet again?
Janet Libert, the editor of "Skyguide Go," is live this morning from Seattle.
Janet, nice to have you.
Thanks for getting up early.
JANET LIBERT, EDITOR, "SKYGUIDE GO": Hi. Nice to be here.
HEMMER: Listen, you remember the argument last September, the U.S. economy could not afford major airlines, major carriers to go belly up. Why is it now a year later that the hand is out once again in Washington?
LIBERT: Well, I think the question there is the word is bailout and really is it a bailout? What the airlines went to the government yesterday for was help in defraying some of the security costs. Last year, before 9/11, airlines spent about $700 million to a billion dollars in security. This year, the costs are going to be somewhere around $4 billion, almost four times what they paid last year. So really...
HEMMER: If that's the case, then, are they loading the airlines too much when it comes to security, in effect, the two of us pay for it?
LIBERT: Well, in essence somewhere along the line we do. But really what they're looking for is help in defraying the costs on what the government's asking for -- reinforced cockpit doors, first class seats for air marshals, passenger document screening. Those and more are security issues that the government has mandated is what the airlines are looking for help on.
HEMMER: Passengers right now are paying about $2.50 per leg as an additional security measure. I think they call it the 9/11 charge if you pick up your airline ticket. Raising about $900 million a year. How much more are the airlines saying they need?
LIBERT: Well, you know, they need probably three times that or four times that.
HEMMER: Really? Three times?
LIBERT: Really. Right. They say somewhere around $4 billion is what they need to cover the costs of security. But what you're raising there is another very important point that the airlines are facing and that is that for every airline ticket you purchase, you're paying about 25 percent in taxes. So a $200 round trip airline ticket, actually, $52 of that is taxes. And as airlines are trying right now to get passengers back on board, that becomes much more of a difficulty when the prices are artificially high from the airlines' point of view.
HEMMER: Janet, you said something that caught my eye after talking with some of our producers. You say the airlines should raise their rates. I don't know a whole lot of consumers out there that would buy that one. But tell us why.
LIBERT: Well, actually right now the airline ticket prices are at a 15 year low. It's an amazing situation. And it's due to many things. It's due to the economy. It's due to the very accessible low fares on the Internet. It's due to the competition from the low fare carriers. But what airlines really do need to do is raise that fare. And traditionally that higher fare has been paid by business travelers. But in recent years it's gotten to such a degree that business travelers are paying five times what a leisure traveler is paying. And now business travelers are saying no more, no more, I'm going to take what comes with paying for a non-refundable ticket.
HEMMER: Yes, Janet, listen, 30 seconds left here. If you were an airline executive and you were before Congress asking for more money, essentially, a year ago it was a $5 billion bailout plus $10 billion in loans. If you're looking for more cash, how do you prove your case? And do you take a business model to these law makers in D.C. and say you know what, if you allow us to do this and go this path, we'll\, indeed, turn a profit and won't be back here again?
LIBERT: You know, that's the million dollar question is can they actually -- can the airlines actually do it on their own? And they're working very, very hard to reduce costs right now and to increase revenue, which is why you're seeing all the crazy cost cutting and fees right now.
I think it's a really interesting question. I actually support some federal aid to the airlines on the security issue. But again, there's that point of view of letting the market forces play out. Remember, air travel is critical to the U.S.
HEMMER: Yes, and we'll all see how it plays out very soon.
Thanks, Janet.
Janet Libert, editor of "Skyguide Go" magazine in Seattle.
We'll talk to you later.
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 25, 2002 - 08:17 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: It's certainly been a rough ride for America's airline industry. More than a year after 9/11, the major carriers say they're on the brink of financial disaster, fewer passengers and the overwhelming cost of security. Airline executives before Congress on Tuesday saying they're desperate now, in need of more government assistance.
(BEGIN VIDEO CLIP)
DONALD CARTY, CHAIRMAN, AMERICAN AIRLINES: The bottom line, however, is that providing for the security of our nation's citizens and fighting the war on terrorism are national security issues and fundamentally government functions. As such, given that the government determines what structure needs to be in place to secure our nation's airways, it should pay for it.
(END VIDEO CLIP)
HEMMER: That was the word from Capitol Hill. Airlines have been already cutting back on services and the perks and raising some fees in areas, as well. Will passengers now be feeling even more of a pinch and why should the government help out yet again?
Janet Libert, the editor of "Skyguide Go," is live this morning from Seattle.
Janet, nice to have you.
Thanks for getting up early.
JANET LIBERT, EDITOR, "SKYGUIDE GO": Hi. Nice to be here.
HEMMER: Listen, you remember the argument last September, the U.S. economy could not afford major airlines, major carriers to go belly up. Why is it now a year later that the hand is out once again in Washington?
LIBERT: Well, I think the question there is the word is bailout and really is it a bailout? What the airlines went to the government yesterday for was help in defraying some of the security costs. Last year, before 9/11, airlines spent about $700 million to a billion dollars in security. This year, the costs are going to be somewhere around $4 billion, almost four times what they paid last year. So really...
HEMMER: If that's the case, then, are they loading the airlines too much when it comes to security, in effect, the two of us pay for it?
LIBERT: Well, in essence somewhere along the line we do. But really what they're looking for is help in defraying the costs on what the government's asking for -- reinforced cockpit doors, first class seats for air marshals, passenger document screening. Those and more are security issues that the government has mandated is what the airlines are looking for help on.
HEMMER: Passengers right now are paying about $2.50 per leg as an additional security measure. I think they call it the 9/11 charge if you pick up your airline ticket. Raising about $900 million a year. How much more are the airlines saying they need?
LIBERT: Well, you know, they need probably three times that or four times that.
HEMMER: Really? Three times?
LIBERT: Really. Right. They say somewhere around $4 billion is what they need to cover the costs of security. But what you're raising there is another very important point that the airlines are facing and that is that for every airline ticket you purchase, you're paying about 25 percent in taxes. So a $200 round trip airline ticket, actually, $52 of that is taxes. And as airlines are trying right now to get passengers back on board, that becomes much more of a difficulty when the prices are artificially high from the airlines' point of view.
HEMMER: Janet, you said something that caught my eye after talking with some of our producers. You say the airlines should raise their rates. I don't know a whole lot of consumers out there that would buy that one. But tell us why.
LIBERT: Well, actually right now the airline ticket prices are at a 15 year low. It's an amazing situation. And it's due to many things. It's due to the economy. It's due to the very accessible low fares on the Internet. It's due to the competition from the low fare carriers. But what airlines really do need to do is raise that fare. And traditionally that higher fare has been paid by business travelers. But in recent years it's gotten to such a degree that business travelers are paying five times what a leisure traveler is paying. And now business travelers are saying no more, no more, I'm going to take what comes with paying for a non-refundable ticket.
HEMMER: Yes, Janet, listen, 30 seconds left here. If you were an airline executive and you were before Congress asking for more money, essentially, a year ago it was a $5 billion bailout plus $10 billion in loans. If you're looking for more cash, how do you prove your case? And do you take a business model to these law makers in D.C. and say you know what, if you allow us to do this and go this path, we'll\, indeed, turn a profit and won't be back here again?
LIBERT: You know, that's the million dollar question is can they actually -- can the airlines actually do it on their own? And they're working very, very hard to reduce costs right now and to increase revenue, which is why you're seeing all the crazy cost cutting and fees right now.
I think it's a really interesting question. I actually support some federal aid to the airlines on the security issue. But again, there's that point of view of letting the market forces play out. Remember, air travel is critical to the U.S.
HEMMER: Yes, and we'll all see how it plays out very soon.
Thanks, Janet.
Janet Libert, editor of "Skyguide Go" magazine in Seattle.
We'll talk to you later.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
