The Little Guys Gang Up

• Share

In a break with protocol that has kept airlines from publicly criticizing one another, five profitable low-fare carriers have banded together to oppose a move in Congress to help out the industry's giants, including bankrupt United Airlines. TIME has obtained a copy of a letter from the five airlines to the Bush Administration in which they say that a bill to provide special pension relief to the major carriers (American, Delta and Northwest would be the main beneficiaries, along with United) is "selective subsidization" and "the worst form of intervention that wastes limited public funds and harms consumers." The CEOs of AirTran, America West, Frontier, JetBlue and Spirit airlines argue that the big carriers should not be given government help while they devote millions of dollars to undermining their lower-cost and lower-fare competitors. The CEOs cite as an example United's decision to spend money to repaint some of its planes and start a new low-cost airline called Ted.

The pension legislation, which would effectively defer the airlines' pension obligations for years, is considered to have a good chance of passage, and the relief might come just in time for United, which has until April 8 to submit a reorganization plan to a U.S. bankruptcy judge. United has also asked the government to make $1.6 billion in loan guarantees under a provision designed to relieve the aftereffects of Sept. 11. The smaller carriers complain that taxpayers should not be asked to keep financing those airlines' inefficient ways. "What kind of public policy is it," asks Edward Faberman, a Washington lobbyist who helped compose the letter, "to relieve bad management from their mistakes and to prop up dinosaur companies?" Responds a spokeswoman for United: "These moves are what's needed to be competitive in this environment, and they are being done in cost-effective ways."