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AIRLINES TO RECEIVE $15 BILLION IN AID

Congressional leaders and White House officials agreed early today on a $15 billion relief package aimed at helping the airline industry, reeling in the aftermath of the Sept. 11 terrorist attacks, with an infusion of cash and measures to reassure a wary traveling public.

The negotiators agreed to provide the airline industry immediately with $5 billion in cash and $10 billion in loan guarantees.

"It's another fine moment in terms of bipartisan cooperation," Mitchell Daniels, White House budget director, said after lawmakers and administration officials, in negotiations going past midnight, finished work on the final details.

The House was expected to approve the plan today, and the Senate could follow suit later in the day, sending it to President Bush for his signature.

Congress moved with uncustomary speed last week to approve a $40 billion emergency spending bill to help victims of the attacks on the World Trade Center and the Pentagon, contribute to recovery efforts and fund security and intelligence efforts.

The deal was reached several hours after Bush, in an address to Congress and the nation on the terrorist strikes, promised, "We will come together to promote stability and keep our airlines flying with direct assistance during this emergency."

The bill provides $5 billion in direct aid, the amount the airlines said they would lose by the end of the month as a result of the government-ordered grounding of flights following the terrorist hijackings of four jetliners and the sharp drop in business since service was restored.

It also includes $10 billion in loan guarantees to airlines that face fewer customers, sharp increases in insurance premiums and rising costs for security.

The government has committed $3 billion to help with those rising security costs. The money will come from the $40 billion emergency package passed last week.

Sen. Max Cleland, D-Ga., said security was crucial to bringing back customers. "Money won't help without confidence-building" safety measures, he said.

The bill also contains limited liability protections for airlines, of special concern to United and American, whose planes were hijacked by the terrorists in their suicide missions.

Under the legislation, the attorney general would appoint a "special master" to consider the claims of victims on the ground and make compensation available.

The airlines still would be responsible for the legal claims by relatives of passengers on the four hijacked planes.

Other airlines also would get war-risk insurance for domestic flights. Only international routes now have such coverage.

The final deal was close to what the airlines had been seeking during a week of intense lobbying on Capitol Hill.

Leo Mullin, Delta Air Lines chairman, who represented the industry in two days of congressional hearings, told the Senate Commerce Committee on Thursday that revenues through the middle of next year were likely to be $24 billion less than expected, driving several major carriers into bankruptcy.

"Without immediate financial support from the government, the future of aviation is threatened," he said.

In a letter to Treasury Secretary Paul O'Neill, the investment firm Morgan Stanley warned of "no functioning capital markets for the U.S. airline industry" unless the government provided "relief from what surely would be bankruptcy-inducing liability claims against carriers for collateral damage and loss of life" from the attacks.

While Congress recognized that the airlines needed to be compensated for the losses directly related to the attacks, some lawmakers were concerned about using taxpayer money to help companies overcome financial woes that began before the Sept. 11 attacks.

"I am not interested in propping up carriers that were not viable at the beginning of this month," said Sen. Ernest Hollings, D-S.C., chairman of the Commerce Committee.

Sen. Ron Wyden, D-Ore., a committee member, called for an independent third-party review of how the aid would be dispensed, "if you are going to be fair to all the other businesses that have been shellacked by this."

Lawmakers attending the negotiations said the package did not contain language on helping workers laid off because of the crisis in the industry.

The airlines have announced about 100,000 layoffs, and Washington state's senators were pushing for legislation to help workers, including the 30,000 Boeing employees the company said would lose their jobs by the end of next year because of the expected decline in new plane purchases.

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