Offset+ to Mandated Expenses

Yesterday, President Bush signed a 'war'-related $77 billion emergency supplementary appropriations bill (just $62.6 billion of which will actually go to the DoD), which included $3.5 billion in assistance to airlines and airports, and extended unemployment benefits for airline and other workers. Of the $3.5 billion, approximately $2.9 billion is allocated for U.S. airlines.Delta's CEO, Leo Mullin, said, "This is a very welcome and important step as we continue the public-private partnership that has vastly improved security for air travelers. This federal reimbursement for security costs will allow our industry increased flexibility to deal with issues of cost, competition and capacity that are solely ours to address.

Through its action, Congress has acknowledged that the federal government should bear the costs for national security in the airline industry, just as it does in other sectors of our economy. That acknowledgement will lead, hopefully, to permanent action to relieve the industry of security costs in the future."

(Delta expects to receive approximately $400 million.)

The catch?

The legislation also requires that the compensation for the two top executives in the six major U.S. airlines be limited until April 2004 to their base salary level on April 1, 2003.

FMI: www.firstgov.gov