Airlines: Sympathy Yes, Bailout No

The nation’s airlines seek a multi-billion-dollar "emergency aid package" in response to September 11’s terrorist attacks. The situation certainly looks grim. American Airlines intends to lay off some 20,000 employees, with United Airlines expected to lay off 20,000.

The former chairman of American Airlines said, "My guess is that the airlines will have to raise something between $10 [billion] to $11 billion on the low side and perhaps $25 billion on the high side, of new cash. Now that’s simply more than the airline industry on its own can manage."

The answer is "no."

Remember, while Congress passed an "Authorization for Use of Military Force," it made no declaration of war. True, as the airlines argue, the federal government made them ground all aviation for a period of several days. But can you imagine the CEO, upon learning of Tuesday’s terrorist attacks, saying to the company, "Keep ‘em flying, boys"? No, any responsible, self-respecting CEO failing to issue such an order faced the possibility of disaster given the colossal uncertainly during those critical hours and day.

After all, passengers expect the airlines themselves to provide some measure of safety. Nothing prevented the airlines from instituting some safety procedures we now belatedly consider. According to Washington Time’s columnist Peter Hannaford, it took no federal law for a United Airlines captain to instruct passengers, on last Saturday’s flight out of Denver International, what to do.

The captain said, "I want to thank you brave folks for coming out today. We don’t have any new instructions from the federal government, so from now on we’re on our own…. Sometimes a potential hijacker will announce that he has a bomb. There are no bombs on this aircraft and if someone were to get up and make that claim, don’t believe him.

"If someone were to stand up, brandish something such as a plastic knife and say ‘This is a hijacking’ or words to that effect, here is what you should do: Every one of you should stand up and immediately throw things at that person—pillows, books, magazines, eyeglasses, shoes—anything that will throw him off balance and distract his attention. If he has a confederate or two, do the same with them. Most important: Get a blanket over him, then wrestle him to the floor and keep him there. We’ll land the plane at the nearest airport and the authorities will take it from there.

"Remember, there will be one of him and maybe a few confederates, but there are 200 of you. You can overwhelm them…." Not bad, given the lack of guidance by the Feds.

Supporters of the airline bailout point to the "successful" Chrysler bailout. Successful? From the time Chairman Lee Iacocca pulled the company back from the brink, it consistently got into financial difficulties. In 1998, Daimler-Benz bought Chrysler, but suppose more than two decades ago Congress had allowed Chrysler to fail. Would Ford or Chevrolet have scooped up their assets, producing a more efficient and productive domestic automotive industry?

If Congress bails out the airlines, what about others directly affected by the terrorist attacks? Certainly, the tourism business, hotels, restaurants, and financial services all took direct hits. CNN’s Garrick Utley estimates that in New York alone, the attack closed permanently or temporarily disrupted some 43,000 businesses from large to mom-and-pops. Do they get aid too?

Also, the terrorist attacks likely permanently changed people’s willingness to fly. Many Israelis, for example, simply go out a lot less because they feel safer at home. If people decide to fly less often, should taxpayers step in and make up for the shortfall? Chapter 11 allows a company with financial difficulties to continue operating while shielded from creditors. The airline CEOs could take to the media airwaves and explain their financial difficulties, and make a direct appeal to consumers: Buy an airline ticket now, even if you intend to fly much later. If Americans deem the airlines’ plight legitimate, expect them to open their hearts and wallets as they have done for the American Red Cross and countless other charities and fundraisers set up for post-Tuesday disaster relief.

Besides, airlines began suffering before September 11, given the softness of the economy. Airlines, even in the best of times, remain a notoriously cyclical business with thin profit margins. Did the CEOs base their request on the disaster of Tuesday, or to mask earlier structural problems management failed to heed?

Remember Founding Father James Madison, the principal author of the Constitution, who said, "I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents…" Certainly, the bailout spells good politics. But it is in the heat of emotion that good people must remember to stand on principle.