U.S. Commerce Secretary Don Evans says that President Bush supports the concept of direct financial aid for the nation’s airlines, and may step in with financial support as a result.
Evans told reporters that Bush understood the rules had changes for the airline industry, which is facing a severe cash crunch due to the almost total absence of new ticket sales since last week’s terrorist attack involving four hijacked jetliners.
Most major airline stocks lost between 35 and 50 percent of their value in trading Monday, the first day of stock trading since the attack. Most major airlines have cut their flight schedules by at least 20 percent in the wake of the attack. Continental Airlines announced Saturday it would cut 12,000 jobs, or more than 20 percent of its staff, and warned Monday it would miss $70 million in payments on aircraft-backed loans. Other airlines, including US Airways, America West, also indicated they may cut staff.
US Airways, has also confirmed it will cut about 11,000 jobs and reduce capacity by 23 per cent.
Analysts also expect other carriers, including Northwest Airlines, United Airlines, and American Airlines, to retrench in upcoming weeks. Midway Airlines, which had been operating under bankruptcy protection, has already ceased operations.
Airline executives, who have been lobbying Congress for tens of billions in federal aid, are expected to meet today with Bush administration officials.
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