U.S. agrees on airline bailout, job cuts hit Asia<\/p>\n
SINGAPORE\/CHICAGO (Reuters) - U.S. government leaders agreed
\non a US$15 billion bailout of the national airline industry as
\nlast week's hijacking attacks led to aviation job cuts spreading
\nto Asia on Friday.<\/p>\n
"There's $5 billion of immediate cash aid" for U.S. airlines,
\nsaid Senate Majority Leader Thomas Daschle told reporters.<\/p>\n
The package also included about $10 billion in loan guarantees
\nand provisions for the U.S. government to consider paying some
\nclaims of victims of the attacks, he said.<\/p>\n
Korean Air Co Ltd revealed plans for job cuts on Friday,
\nalthough it did not specify how many.<\/p>\n
Asian carriers appear to have been less affected than their
\nU.S. and European competitors by the attacks, which have deterred
\npeople from flying, hitting the fragile profitability of the
\nindustry just as it faces the cost of new security measures.<\/p>\n
On Thursday, European industry leader British Airways Plc
\nannounced sharp cutbacks in jobs and flights in the face of
\nsharply falling demand, following nearly 100,000 job cuts
\nannounced by the U.S. aviation industry.<\/p>\n
"We face exceptional conditions which have forced us to take
\nvery tough decisions," British Airways Chief Executive Rod
\nEddington said in a statement that announced a 10 percent cut in
\nflights and 7,000 job losses.<\/p>\n
Number-three U.S. carrier Delta Airlines Inc joined its main
\nrivals on Thursday by saying it planned cost cuts, unspecified
\nlayoffs, and service cuts of 15 to 20 percent.<\/p>\n
Fourth-ranked Northwest Airlines Corp is expected to announce
\nlayoffs on Friday and a permanent 20 percent flight-schedule
\nreduction.<\/p>\n
After U.S. leaders agreed on a rescue package, Republican
\nHouse Speaker Dennis Hastert said he expected the full House of
\nRepresentatives to vote on the necessary bill later on Friday.<\/p>\n
Daschle said the Senate would vote on it as soon as possible.<\/p>\n
The two men spoke to reporters shortly after midnight
\nfollowing a nearly two-hour negotiating session involving
\nRepublican and Democratic leaders from both the House and Senate
\nas well as officials from the Bush administration.<\/p>\n
White House budget director Mitch Daniels, emerging from the
\nmeeting, said the Bush administration supported the package.<\/p>\n
Korean Air had said on Thursday it would seek government
\nassistance due to increasing costs in security and insurance.<\/p>\n
On Friday, a spokesman said: "Our restructuring plans will
\ninclude a certain amount of job cuts, although the size and time
\nframe is under review."<\/p>\n
The airline would also cut services to U.S. cities.<\/p>\n
European Union officials are also looking at relief for their
\nairlines, which are suffering badly from the attacks but not so
\nseverely as U.S. carriers.<\/p>\n
After an emergency meeting in Brussels with top airline
\nexecutives, EU Transport Commissioner Loyola de Palacio said aid
\n-- normally ruled out by EU competition laws -- might be
\npermitted, but other measures should be considered first.<\/p>\n
Boeing Co., the world's largest jet maker, said on Tuesday it
\nwould lay off between 20,000 and 30,000 workers -- up to 15
\npercent of its work force -- by the end of next year in
\nanticipation of a sharp drop in orders.<\/p>\n
Chicago-based Boeing on Thursday said it was working with
\nmajor aircraft lessors to finance new commercial jets ready for
\ndelivery to battered airline customers. So far no orders have
\nbeen cancelled, but Boeing was bracing for the worst.<\/p>",
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