Airlines in the Aftermath

Even before the world witnessed the disastrous hijacking of four commercial airliners on Sept. 11, 2001, the airline industry sat precariously close to financial ruin. The terrorist attack and the need for major investments in airport security have pushed the airlines into nothing short of a fight for survival.

Congress responded quickly and sensibly last Friday by approving a bill which will allocate a $15 billion emergency grant to the airline industry once President George W. Bush signs the legislation, as he has already stated he will. Whether or not to provide heavy assistance to the airlines did not pose much of an economic dilemma for U.S. lawmakers; the airline industry is a major sector of the U.S. economy, and many other industries depend on air travel as part of our nation’s basic infrastructure.

The bill was not unanimously approved, however. A significant number of legislators and labor advocates have criticized the bill for overlooking the needs of the 80,000 airline workers expected to be fired in the aftermath of the attacks. With most flights taking off at half-capacity and the major carriers announcing a 20 percent long-term reduction in the number of flights offered, the financial fallout will extend well beyond the airline industry. Boeing, the nation’s leading aircraft manufacturer, has already announced that it will lay off as many as 30,000 machinists and other workers. In response to these feared layoffs, Sen. Jean Carnahan (D-Mo.) has announced plans to introduce a $3.75 billion bill that would provide health coverage, job training and unemployment benefits for former airline workers.

The spirit behind Carnahan’s proposed legislation is commendable. Yet it also highlights one of the major temptations lawmakers will face as they confront the financial costs of stabilizing the airline industry. The economic aftershocks of the Sept. 11 attack will be widespread; in addition to the airline industry, tourism, insurance and shipping are also sure to suffer substantial losses. Congress cannot identify, let alone compensate, every company harmed by the attack and every worker laid off as a result. Instead, it should focus its efforts on preventing widespread bankruptcies in industries vital to the nation’s economy. The airlines present an immediate risk, but if most of the nation’s insurance companies were to fail due to the attack, America’s economic infrastructure would be similarly jeopardized. In giving direct aid, Congress’s mission is not to redress all wrongs, but to make sure the U.S. economy continues to function.

This is not to say that laid-off workers should be abandoned. Unemployment benefits must be made available for everyone eligible to receive them. But special consideration should not be given to one group of unemployed workers simply because of the circumstances surrounding their untimely dismissals.

The months ahead will no doubt bring numerous fiscal, social and political challenges. To the best of its abilities, the federal government must continue its stewardship of the nation’s economy. But at the same time, it must also be careful not to undermine its capability to help by overextending its economic resources.