LINDA WERTHEIMER, host:
This is WEEKEND EDITION from NPR News. I'm Linda Wertheimer.
This week, NPR will be looking at the growing problems facing the nation's air transport system. Airlines are cutting fares and flights, and businesses are canceling orders for corporate jets. The FAA itself is facing lots of problems with its budget and its leadership. Here to tell us about the Troubled Skies series is Marilyn Geewax, NPR's senior business editor. So, Marilyn, what's been happening in aviation?
MARILYN GEEWAX: Linda, we've heard a lot in recent months about the hard times that have been facing builders, lenders, manufacturers, but aviation is in a world of hurt, too. Flying has always been a tough way to earn money. Mo Garfinkle, an airline consultant, put it this way to one of our reporters.
Mr. MO GARFINKLE (Airline Consultant): You've probably heard the adage about how do you make $10 million in the airline business? You start off with 100 million.
GEEWAX: You know, in 2001, airlines had an especially hard time. They got hit with terrorist attacks, there was a recession and they've been struggling to come back ever since then. And finally, last year, it looked like they were going to make it, things would stabilize. And then remember what happened last summer: oil went to almost $150 a barrel. So they were back in the soup again. The airlines started cutting flights, they slashed 28,000 jobs, they added all kind of fees: $15 for a bag to check, $2 for a bottle of water.
So they finally thought they got it right. And then, bang, again, this year, a shrinking economy. So the number of passengers is down 12 percent from last year. The money being spent on plane tickets is down 19 percent. They're getting killed again.
WERTHEIMER: So, do you think we're going to see another round of extinct airlines, bankruptcies this year?
GEEWAX: The industry says no. They think they can cut the number of flights quickly enough to squeeze out at least a little bit of a profit this year. But that's going to depend largely on oil prices holding at their current level. But everybody recognizes this is a very tough time. Transportation Secretary Ray LaHood put it this way.
Secretary RAY LAHOOD (Department of Transportation): Business has decided to tell their employees, if you don't have to travel, don't travel, because we need to save money. Leisure travelers probably don't have the kind of money because they're worried about whether they're going to keep their job. And so, in a lousy economy, the airline industry is like a lot of industries, it's hurting right now.
WERTHEIMER: What about corporate jets? We heard a lot about the auto executives flying them to Washington last November. Are those jets still jetting?
GEEWAX: Well, that bad publicity from last November just killed the industry. We've got a terrible economy and then you had that kind of image problem, so manufacturers of corporate jets have been cutting jobs like crazy - down about eight percent this year because of the falling orders. And it's getting worse. Last week we saw that Sears filed with the FCC, and they said they're selling off their two Learjets.
WERTHEIMER: Well, now, given that Congress has been doing a lot to bail out banks, and insurers and auto companies, has it been doing much to help aviation?
GEEWAX: A big chunk of our series is going to look at the ways that Congress and the White House have been failing this troubled sector by not shoring up at the Federal Aviation Administration. The FAA hasn't had a formal budget or regular administrator for nearly two years. Lawmakers keep arguing with each other over how to pay for upgrading the air traffic control system. They can't agree, so they just keep passing temporary budgets. The Democratic Senate also wouldn't approve President Bush's appointee to head the FAA during the last Congress.
So these stalemates have left the FAA hampered. It hasn't been able to move full speed ahead with upgrading the air traffic control system. That means more flight delays. And you know what flight delays mean for us as travelers, they're miserable and it hurts the airlines because it costs them money.
WERTHEIMER: Senior business editor, Marilyn Geewax. Thanks, Marilyn.
GEEWAX: You're welcome.
WERTHEIMER: The Troubled Skies series begins on MORNING EDITION tomorrow. And if you want to suggest steps that government could take to protect the rights of passengers or just add your two cents, visit the Web site, npr.org.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.