For some time now, analysts have agreed that a long-term armed conflict with Iraq would be devastating for the airline industry. Some key members of Congress are drafting legislation to give the airlines a financial boost in the event we jump into a full-scale war. Rep. James Oberstar (D-Minn.) is leading this effort with the drafting of a bill that includes reopening a federal loan guarantee program to cover rising fuel prices, as well as provisions on war-risk insurance. Oberstar — the ranking Democrat on the House Transportation Committee — told Reuters his proposal will be introduced “as soon as possible.” This program would also compensate airlines for strengthening their cockpit doors, a security measure imposed by Congress after the hijack attacks of Sept. 11, 2001. The proposed bill might also include some provisions for opening U.S. strategic petroleum stocks to ease fuel costs. While Oberstar and his Democratic colleagues seem ready to move this process along, some House Republicans are holding back, especially after Congress’s last airline bailout, which added up to a $15 billion package of cash and loan-guarantee assistance. To help plead their case, airline representatives will testify at a hearing on March 12.
Proposed Bill Would Aid The Airlines During War
Key Takeaways:
- Key members of Congress, led by Rep. James Oberstar, are drafting legislation to provide financial aid to the airline industry in anticipation of a devastating impact from a potential long-term conflict with Iraq.
- The proposed bill includes reopening a federal loan guarantee program to cover rising fuel prices and war-risk insurance, and would compensate airlines for strengthening cockpit doors.
- Additional provisions might include opening U.S. strategic petroleum stocks to ease fuel costs.
- The effort faces resistance from some House Republicans due to previous airline bailouts, with airline representatives scheduled to testify to advocate for the bill.
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