Subcommittee on Aviation
Hearing on
Financial Condition Of The Airline Industry
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TABLE OF CONTENTS(Click on Section)
PURPOSE
BACKGROUND
WITNESSES
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PURPOSE
The Aviation Subcommittee will hold a hearing to receive testimony on the financial condition of the U.S. airline industry one year after the September 11, 2001 terrorist attacks.
BACKGROUND
After the terrorist attacks of September 11, 2001, there was serious concern that, without significant U.S. government financial support, many U.S. airlines would go bankrupt. In response to this concern, Congress enacted the "Air Transportation Safety and System Stabilization Act" (P.L. 107-42), which was signed into law on September 22, 2001. The Stabilization Act provided a total of $5 billion in compensation to air carriers for direct losses incurred as a result of Federal ground stop orders and for incremental losses incurred between September 11, 2001 and December 31, 2001, as a direct result of the terrorist attacks. In addition, the Stabilization Act provided for up to $10 billion in airline loan guarantees.
STATUS OF IMPLEMENTATION OF STABILIZATION ACT
Direct Compensation
As of September 18, 2002, $4.55 billion of the $5 billion in direct compensation provided by the Stabilization Act had been paid to a total of 396 passenger and cargo air carriers. The bulk of these funds were distributed in 2001, including $2.3 billion that was distributed very quickly -- by October 1, 2001.
The Department of Transportation (DOT) initially used procedures set out in Program Guidance Letters to make a first round of payments amounting to nearly 50 percent of the $5 billion total. On October 29, 2001, D ...