Since the Sept. 11 attacks, many people have been averse to using airplanes to get to travel and, in effect, the airlines lost billions of dollars, forcing Congress to bail them out with $5 billion in assistance. United Airlines has declared bankruptcy, and American Airlines is rumored to be on the way.
Considering the effect of the impending war on Iraq, the airline industry has estimated a loss of approximately $10 billion and is now asking Congress for loans and cash amounting to more than $10 billion and tax breaks totaling $9 billion. Limited assistance should be given to the airlines, as long as they do their part in examining their operations and adjusting their capacity to consumer demand.
The airline industry is a major component of our economy and a valuable service. For the most part, the folding of the airlines will hurt the middle class and businesspeople. Because of the money airlines have had to spend on increasing security measures, the government should assist them to compensate for their losses. For the weight the industry carries, the airlines should be given some tax-free loans to alleviate stress they will have from losing consumers and facing the rising costs of fuel. After the war, the economy will rise again, allowing the airlines to repay the government.
However, members of Congress should question how much the government should contribute to one industry. Other companies will undoubtedly encounter rough times as a result of the war and the already poor economy.
The fact remains that, no matter how much the government assists the airlines, consumers will still be wary to get on a plane, and gas prices will still be increasing. The demand will continue to decrease, pushing ticket prices down. Ultimately, it is a cooperative investment; both the government and the airlines will have to rise to the occasion to mend the problem.
University Wire — Rutgers University