Senator Kay Bailey Hutchinson (R-TX) plans to propose an amendment to the FY 2003 Supplemental Appropriations Bill, intended to assist the struggling airline industry.

First, the amendment will reduce the federal passenger ticket tax from 7.5% to 5% for one year. The Department of Transportation general fund will reimburse the airline trust fund for lost revenues. Such a reimbursement is expected to cost about $1.8 billion.

Hutchinson’s amendment would also provide the airlines with $1 billion to cover security costs accrued since 9/11. Air carriers will work individually with the Department of Homeland Security to determine how much money each carrier is entitled to.

The amendment also extends the availability of federal war-risk insurance for another year. The policy was supposed to end on December 31, 2003.

Finally, Hutchinson’s amendment would make permanent the $100 million limitation on airline liability for third party damages from acts of terrorism. The amendment may be considered when the Senate beings mark-up of the supplemental appropriations bill on or about April 1st.

On the Senate side, the committee with jurisdiction over the airline industry is the Commerce, Science and Transportation Committee chaired by John McCain (R-AZ). McCain recently chided Delta Airlines for providing executives with million-dollar bonuses, while simultaneously laying off thousands of workers. McCain told reporters at that time that an airline aid package “might be in danger”.

In the House, Democratic Whip Steny H. Hoyer (MD) and House Transportation and Infrastructure Committee Ranking Member James L. Oberstar (D-MN) met with airline representatives March 27. Hoyer feels, "a healthy airline industry is key to a strong economy and our nation's security, so it is the responsibility of Congress to be a part of the solution--to not act is not an option." Oberstar stressed the need to relieve the great security burden placed on the airlines after 9/11. The Minnesota Democrat also feels the federal government has a responsibility to mitigate the adverse affect that rising fuel costs have had on the airline industry.

On the Republican front, an aide to Speaker of the House Dennis Hastert (R-IL) confirms that the Speaker supports some form of direct aid to the airlines in the supplemental appropriations bill, but did elaborate on specifics. House Aviation Subcommittee Chairman John Mica (R-FL) also supports some form of aid, but has advised lawmakers not to strip the airline trust fund of revenue to finance such aid. Mica feels the trust fund must remain intact to fund key airport infrastructure projects funded out of AIR-21.