Bush, Not ARTA Stalls Airline Aid

White House calls latest aid proposals "excessive"

By: Jerry Chandler

A last-ditch letter-writing campaign, launched by the Association of Retail Travel Agents to fight further taxpayer-funded relief for the airline industry, appears to have had little effect on Congress.

Opposition from the White House, however, has.

As this story went to press, lawmakers were poised to pass a $3.5 billion package aimed at bailing out the foundering industry.

White House spokesman Ari Fleischer, however, called that amount “excessive.” Fleischer said the administration supports some amount of aid, but the $3 billion-plus proposal is too much “given the economic facts on the ground.”

ARTA President John Hawks said the legislation doesn’t “address the fundamental problems with the way the airlines are structured,” noting that carriers need to make more progress on labor costs, overcapacity and executive pay to have a legitimate shot at survival.

The centerpiece of ARTA’s initiative was a fact sheet that it urged members to fax to their congressional representatives.

The sheet said that, counter to airline complaints about $9 billion in federal taxes on airline tickets, it is passengers who pay most taxes.

It also said that airline tax rates were lowered in the 1990s, that tax money is used to maintain the air transport system and that the tax burden on tickets is no greater than that on other U.S. goods and services.

Few agents responded to the initiative. “We had probably about two dozen folks ask for it, who sent it on to their congressional representatives,” Hawks said. “I think with everything else agents have on their plates, I don’t think we were very surprised” by the poor response.

But some airline observers are disappointed that ARTA would use such a tactic.

It “is one of the reasons travel agents are becoming marginalized,” asserted Mike Boyd, president of the Colorado-based Boyd Group, a noted aviation consultancy.

Without tax relief, he said, “it’s going to be harder for airlines to get through this,” and added that ARTA appeared to be “grinding some axes here.”

The American Society of Travel Agents is taking a bit different tack towards tax relief. “We need healthy airlines in order to have a strong transportation industry,” said ASTA president Richard Copland.

However, Copland and others, including Sen. John McCain, R-Ariz., were angered by recent reports that airline executives have received large bonuses. And Congress has added a provision requiring a two-year pay freeze for executives.

“The money is going for a very specific need,” said Senate Majority Leader Bill Frist, R-Tenn. “It’s not going to be bailing out the high end or the employers themselves, but it’s going to be directed at incremental costs incurred because of the war.”