Airlines awarded $1 billion in military contracts since October
NEW YORK (AP) – Commercial airlines have been awarded more than $1 billion in military contracts since October as the war in Iraq increased demand for transporting troops, supplies and humanitarian goods to the region, military officials said Wednesday. Separately, an airline industry trade group on Wednesday said the three-week-old military conflict has devastated its business, especially internationally, and it reiterated a plea for billions in federal aid.
Officials at the U.S. Air Force Air Mobility Command, which oversees airlift services for the Department of Defense, told The Associated Press that $1.06 billion was awarded to civilian airlines between Oct. 1 and March 3.
Last month, the agency estimated that charter airlift expenditures for fiscal year 2003 would amount to about $618 million.
Although Air Mobility Command would not break out the value of individual contracts, companies that routinely provide military airlift services include American Airlines, United Airlines and cargo carriers such as Atlas Air. More than 30 companies have contracts with the military.
“It has given us additional revenue at a time when we surely could use it,” United spokesman Joe Hopkins said of the military airlift services.
In fiscal year 2002, when the United States invaded Afghanistan, a total of $1.38 billion was paid to commercial air carriers, according to Lt. Col. Scott D. Ross, a spokesman for the U.S. Transportation Command at Scott Air Force Base, Ill. The year before that, commercial airlines received $671 million, he said.
While carriers have picked up some business as a result of the war, the decline in leisure and corporate travel has had a far greater impact, industry officials said. The Air Transport Association, the main trade group for U.S. carriers, has said the war could widen the industry’s losses in 2003 by $4 billion.
On Wednesday, the trade group reported that systemwide traffic was down 17.4 percent for the week ended April 6, compared with a year ago. Two weeks earlier, the year-over-year decline was 10 percent.
The steepest drop in demand since the start of the war occurred in trans-Pacific travel, the group said, highlighting the impact of a puzzling lethal illness that is believed to have originated in China.
For the week ended Sunday, traffic in the Pacific region was down 25.8 percent compared with a year earlier. Two weeks ago, travel demand there was down 13 percent.
Carriers around the globe have reduced service to the region and some have begun making protective face masks available to passengers and flight crews.
“The world situation continues to play havoc with the airline marketplace,” Jim May, the trade group’s president said. May also reiterated the industry’s plea for federal aid.
The House and Senate have approved separate aid packages in their supplemental budget proposals. The Senate plan is worth about $2.7 billion. The House’s proposal is for roughly $3.2 billion. The Bush administration has called both proposals excessive.
Domestically, passenger traffic was down 14.7 percent for the week ended April 6. When the war began, domestic travel was down just 7 percent.
AP-ES-04-09-03 1744EDT