Federal Bail Out Helps Airlines Post Profits

A federal agency intended to bail out airlines foundering after the Sept. 11, 2001, terrorist attacks could make about $ 300 million this year.

And the pilots union is pretty angry about that.

The Air Transportation Stabilization Board, which approved loan guarantees for the old US Airways ($ 900 million) and its merger partner, America West Airlines ($ 380 million), as well as four other airlines, predicted Tuesday that it could post a profit of about $ 300 million for taxpayers this year.

"This profit is an insult to every airline employee who has contributed to the billions in pay concessions and has endured severe reductions or total loss of their pensions, all while working longer hours and paying more for health care," ALPA President Duane E. Woerth said in a prepared statement.

The terrorist attacks, he said, prompted economic disaster for the airline industry, and the ATSB was created to assist by offering as much as $ 10 billion in loan guarantees.

"The ATSB has utterly failed to deliver," Woerth's statement said. "It has withheld 84 percent of these funds, making only $ 1.6 billion in loan guarantees to a handful of carriers."

United Airlines, which lost aircraft, staff and customers that day and emerged from its three-year bankruptcy on Wednesday, was among the companies denied assistance.

One stipulation for the loans included the ATSB owning collateral in the airlines it aided. And at least in US Airways' case, the airline had to keep a set amount of cash on hand.

US Airways sold its loan in October to unnamed investors. At the time, the airline had $ 777 million remaining in principal, as well as nearly $ 250 million from the loan to America West. In the sale, the ATSB received $ 180 million in interest and fees. It also received nearly $ 116 million when America West bought back stock from the agency.

The ATSB could not be reached for comment, or to clarify whether this money gained from US Airways and America West would be included in the 2006 figure.

"It is the height of cynical hypocrisy for them to boast about a profit largely based on the ATSB's remarketing of these loans, as well as the sale of airline stock and warrants they received from the few airlines that did obtain a guarantee," Woerth said in his statement.

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