Contact:  Steve Hansen (Director of Communications)  (202) 225-7749
 Email: Steve.Hansen@mail.house.gov
     Justin Harclerode (Deputy Director of Communications)  (202) 226-8767
  Email: Justin.Harclerod@mail.house.gov

To:  National Desk/Transportation Reporter
October 2, 2002 

        Washington, D.C. - The U.S. House Subcommittee on Aviation today unanimously approved by voice vote legislation to provide relief to the aviation industry by extending War Risk Insurance coverage, reopening the loan guarantee program for applications by struggling air carriers, and to reform the Federal Aviation Administration (FAA) to improve air traffic control efficiency.

        The Aviation Industry Stabilization and Reform Act (H.R. 5506), was introduced in the House by Aviation Subcommittee Chairman John L. Mica (R-FL).  The legislation was written to address some of the needs of an aviation industry that has shown little signs of recovery since the September 11, 2001 attacks.  The Subcommittee held hearings in the last few months on the financial state of the industry, and on the problems with the FAA Chief Operating Officer and air traffic control oversight board.

        “Simply put: the airline industry continues to struggle with rising security costs and shrinking revenues.  One major carrier has already filed for bankruptcy and others may soon follow.  This could set off a wave of additional job losses, business closings, and bankruptcies.

        “Last year, the airlines lost $7.7 billion and will probably lose another $7 billion this year.  The situation is critical.

        “This legislation will cut costs, fairly share the security burden, and help bring airline workers back to work without raiding the taxpayers’ pocketbooks.

        “If we fail to act, the airline industry could be another victim of the September 11th attacks.  Congress must not idly standby and wait for that to happen,” said Mica.

        Highlights of the bill include the following:

        - War Risk Insurance – the bill will:

• Limit airline liability for 3rd party damages (i.e., injuries to people in a building or on the ground) from acts of terrorism to $100 million.
• Extend existing war risk policies until the end of next year at premiums no higher than now.  Currently, DOT has been extending the policies for 60-day periods and raising the premiums.  The current policies expire on 10/16/02.  These policies cover only damages to third parties, not damages to passengers, crew or the aircraft itself.  The bill would extend the coverage to these as well.
• Correct the provision that now limits DOT to extending the coverage for only 60-day increments.

        - Federal Aviation Administration Reform – the bill will:

• Allow the final vacancies on the Management Advisory Council (MAC) to be filled without Senate confirmation.
• Separate the Air Traffic Services Board (ATSB) from the MAC (it is now a subcommittee of the MAC) and make it a stand-alone Board within the FAA.
• Make the FAA Administrator the Chairman of the ATSB.
• Eliminate compensation for Members of the ATSB.
• Change the job description of the COO to “implementing the strategic plan” rather than “developing the strategic plan” and to “overseeing day-to-day operations of the air traffic control system” rather than “reviewing operations of that system” as that job description is more appropriate for a COO.  Require the COO to develop a comprehensive plan with specific performance goals for managing cost-reimbursable contracts as recommended by the Inspector General.

• Establish a deadline for the screening of mail so that it can be carried on passenger airlines; and make clear that postal workers would be considered Federal employees and allowed to do the screening.
• Allow citizens of U.S territories and possessions to be screeners.
• Delete the requirement that there be Federal law enforcement officers at all airports and permit local law enforcement officers to perform that function.
• Exempt military charters, performed by civilian aircraft, from the provisions of the Aviation and Transportation Security Act.
• Exempt recurrent training of foreign pilots from the DOJ background check requirement since they already know how to fly a plane.
• Allow airline employees with a disqualifying crime on their record to apply for waivers in order to keep their job.
• Require TSA to reevaluate the seating of air marshals on an aircraft after the cockpit doors are hardened.

• Express a Sense of Congress that the President should take steps to reduce the adverse impact on the aviation industry of any possible disruption of fuel supply in the event of war with Iraq;
• Extend the loan guarantee program to include paying for costs of a significant aviation fuel price increase in the event of war;
• Establish a working group to recommend enhancements of the program for shipping cargo on passenger aircraft;
• Require the Under Secretary for Transportation Security to conduct a threat assessment for airports;
• Require the Under Secretary to study blast-resistant cargo container technology;
• Express a Sense of Congress that the Secretary should convene a stakeholders’ conference on redesigning the air transportation system to address passenger needs after the events of 9/11/01; and
• Express a Sense of Congress that the Air Transportation Stabilization Board should, in the interests of competition, give weight to the need to ensure the survival of smaller carriers.