Airlines beg Washington to help them survive

"The basic problems go beyond something public policy is likely to address."

Philip Baggaley, airline industry analyst with Standard & Poor's Ratings Services

Out ideas for competing in a brutal climate, the struggling big airlines are begging Washington for policies that will help them survive.

The latest industry figure to seek assistance is the chief executive of Delta Air Lines, Gerald Grinstein.

In an interview on Thursday, he called on federal officials to establish a comprehensive aviation policy that would offer the companies specific guidelines in areas like bankruptcy, mergers, fuel prices and taxation.

But industry analysts say the airlines may not get the help they are seeking, because there is not a place within government for one-stop policy shopping.

At the same time, with the government already involved in the airline industry through costly measures including pension bailouts and federal loan guarantees, there may be a reluctance to offer more assistance.

"The basic problems go beyond something public policy is likely to address," said Philip Baggaley, an airline industry analyst with Standard & Poor's Ratings Services.

Transportation Norman Mineta, who has discussed similar concerns with labor leaders, is always willing to meet with industry officials, said a department spokesman, Brian Turmail. But, he said, the department's primary mission is to ensure the safety and efficiency of the nation's transportation.

"I'd hate to give the impression that we're ready to set sweeping policy across the industry," Turmail said on Thursday.

Though airlines' safety and security remain under government control, former US president Jimmy Carter deregulated other aspects of the industry in 1978, including fares and routes.

Grinstein he did not support reregulating the airlines, an issue raised by union officials after travelers encountered widespread delays over the Christmas holidays.

But Grinstein said that the industry was too important to the nation's welfare for government agencies, Congress and the White House to ignore it.

"There ought to be some understanding of what may have to take place in the industry" so that big airlines, which have lost US$30 billion since 2000, can become successful again, Grinstein said.

His plea for a wide-ranging aviation policy comes amid a wave of moves in Washington by major airlines.

Grinstein's is among a number of airlines that are aggressively backing legislation that would allow them to stretch out their overdue pension contributions. Also, the federal pension agency has reached a US$1.5 billion deal with United Airlines that would give it a stake in the company when it emerges from bankruptcy protection, which it entered in 2002.

The federal Air Transportation Stabilization Board already has a stake in some airlines, thanks to packages of loan guarantees awarded after the September 2001 terrorist attacks.

Two those airlines -- US Airways, which is in bankruptcy protection, and America West -- are in merger talks.

Collectively, they owe more than US$1 billion on federally backed loans, which might have to be restructured if the two companies combine.

The industry's most profitable airline, Southwest Airlines, is also asking for action. It wants Congress to repeal the Wright Amendment, which limits the number of states that airlines can serve from Love Field in Dallas, where Southwest is based.