Airlines flying away with bailout bundle

August 29, 2002|By Christopher Elliott

NOW THAT US Airways is bankrupt and United Airlines is following its vapor trail into the abyss of insolvency, here's a question worth asking:

What happened to all that money we gave the ailing airline industry after Sept. 11?

Congress allocated $15 billion to save the carriers after the terrorist attacks, of which $5 billion was outright grants. Of that, US Airways pocketed $287 million and United took $724 million. Are these airlines going down and taking our tax dollars with them?

Possibly. Although the affected airlines insist the government money was well-spent -- thanks very much -- all this talk of bankruptcy leaves the average taxpayer with the impression the money was wasted. If it wasn't -- and we all hope that's the case -- then let me be the first to ask: Where's the evidence?

Surely US Airways' reassurance that it will emerge in the spring as a stronger carrier proves that we didn't throw government funds at a lost cause.

"Our customers should be confident that we will continue service to the more than 200 communities in our network," US Airways' chief executive, David Siegel, promised Aug. 11 on the eve of his airline's bankruptcy filing.

Several days later, however, his airline quietly announced it would eliminate service between Pittsburgh and Saginaw, Mich.

Now there's a confidence-building move if I've ever seen one.

Maybe United Airlines' self-imposed 30-day deadline, by which time it must pull itself out of its debt trouble, is evidence of the carrier's clear resolve. Or its tough-talking CEO, Jack Creighton, who recently declared that United will "do whatever it takes to continue to meet the needs of our customers for many years to come."

We want to believe him, but those of us who remember what it was like to fly on United before its troubles began might doubt that the airline ever knew how to take care of its customers in the first place. If taking care of passengers means charging your best customers prices that are four times higher than the advance-purchase fares, then maybe we're better off without Mr. Creighton's help.

We hear the airlines make promises, but experience tells us not to listen. They say that it's "business as usual" as they file for Chapter 11 protection, but bankruptcy has such a ring of finality to it.

Bankrupt means you can't pay your bills. Bankrupt usually means you're going out of business. That's what it meant for Eastern, Pan Am and TWA. Do they think we've forgotten?

Face it, the $287 million given to US Airways and the $724 million given to United was squandered.

And more of it is about to be misspent. Curiously, US Airways hopes to qualify for another $1 billion in federally backed loans by declaring bankruptcy. United is trying to secure a $2 billion loan guarantee and is threatening to file for bankruptcy if it doesn't get it.

The intent of the federal aid under last year's Air Transportation Safety and System Stabilization Act was to compensate air carriers for losses incurred as a result of the terrorist attacks on the United States. But the legislation was sold to us as an investment in the future of America's air transportation system. The airlines took our money and used it to fund their failure. They accepted our hard-earned tax dollars and now they want to take even more of our money before they go under.

Thanks for nothing.

Christopher Elliott is the ombudsman for National Geographic Traveler magazine. He can be reached via e-mail at celliott@ngs.org.

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