The Brancatelli File



October 25, 2001 -- I’ve been looking over some of the airlines’ third-quarter financial results and watching the continuing Congressional machinations over airline and airport security. As much as I try to take those issues as seriously as they deserve to be taken, I keep coming back to Jack Benny.

You will recall that Benny’s greatest routine concerned his confrontation with what we now call an evildoer. Said evildoer accosts Benny, sticks a gun in his ribs and says, “Your money or your life!” Benny hesitates and the evildoer gets angry. “I said, ‘Your money or your life!’ ” Benny then stares into the camera, grimaces, and deadpans, “I’m thinking! I’m thinking!”

See if Benny comes to your mind after thinking about some of the following issues of our money and our lives on the road.

Within hours of the indescribable tragedies of September 11, the airlines changed into their corporate sackcloths, got out their begging bowls and proceeded to demand a taxpayer bailout. Eleven days later, while most of the nation was tuned to a telethon to raise funds for the victims of September 11, the airlines skulked out of Washington with $5 billion in tax grants tucked into their private pockets.

So how come three of the first four airlines to report third-quarter results have run up a profit? And how come two of those carriers apparently turned a profit on their shares of the federal bailout?

Alaska Airlines reported a net profit of $25.3 million for the July-September fiscal quarter. Even without its share of the bailout--$18 million after taxes--Alaska turned a third-quarter profit of $7.3 million. Southwest’s third-quarter net income was $151 million. Its earnings were helped by a pre-tax gain of $169 million from the federal bailout (AKA your tax dollars at work). That amount is especially interesting in light of the fact that Southwest only took a $58 million charge arising from the terrorist attacks. Northwest’s share of the government bailout, a cool $249 million, helped it record a $19 million third-quarter gain. Meanwhile, American Airlines, the only carrier so far to report a third-quarter loss, received $508 million of your taxes. That’s a cool $111 million more than the $397 million special charge American took for costs related to September 11.

I don’t want to mislead you. The airline industry is bailing some heavy financial water. But most of the losses they will eventually rack up are due to their own incompetence: an outrageously unfair and convoluted fare structure, absurd overcapacity, miserable service standards and laughably inept management teams who remind you of some other comedy legends. (I’m thinking Three Stooges, are you?) But fear not, fellow flyers, because more of your tax dollars are on the way to cushion the blow these poor, poverty-stricken airlines will absorb. Having already dispersed $2.4 billion of the tax heist, the Transportation Department said this morning that it is prepared to release another $2 billion in “grants” to airlines as compensation.

How, you may wonder, did this pack of war profiteers get their hands on the tax treasury? Thank your local Congressperson and Senators. They voted in overwhelming numbers to give the airlines $5 billion in tax grants. Why did they do that? Look at the political bottom line. According to the Center for Responsive Politics, the airline industry contributed $6.8 million to federal candidates during the 2000 elections. Airlines have poured in another $1.3 million since January 1.

In fairness to the airlines, though, you have to admit they made a terrific investment with their contributions. That $8.1 million is yielding a return of $5 billion in tax grants. Are any of your investments doing that well?

Bet you thought I’d forgotten about the life part. Nope. We now come to this fact: Six weeks after the horrific events of September 11, the House Republican leadership continues to block any attempt to improve airport security.

On October 11, the Senate voted unanimously--that’s 100-0, every Democrat and every Republican, for those of you who can’t do the math--to federalize airport security. By the current profligate standards of Washington, the measure is a model of restraint. It calls for screeners to become employees of the Justice Department, just like the FBI. Yet it exempts the screeners from federal pay and job-security protections, which means there can’t be any incompetent screeners hanging on to their jobs thanks to the machinations of the big, bad federal bureaucracy.

But the stooges who claim to speak for the House Republicans (ah, there’s that Three Stooges imagery again!) will have none of it. Or, as House Transportation Committee Chairman Don (Call Me Curly) Young said upon hearing of the unanimous Senate vote: “We’re not even going to talk about the Senate bill.”

The House Republican leadership’s airport-security bill, introduced by Shemp Young and Aviation Subcommittee Chairman John (Call Me Larry) Mica, is an incredibly callous bit of hokum. It leaves security oversight to the Department of Transportation, the same clueless crew that has been mishandling airport security for a generation. Shockingly, it leaves day-to-day airport security in the hands of the same private companies that have been hiring ex-cons, illegal aliens and drug abusers to man the nation’s security checkpoints.

Of course, Curly Young and Larry Mica haven’t brought their bill to the floor of the House. Even with the full support of their eye-poking martinet of a leader, House Majority Whip Tom (Call Me Moe) DeLay, it has no chance of passage. Most House Republicans find their leadership’s measure surreal. Dozens have publicly backed the Senate bill.

But what the hell, it’s only our lives. What do Moe DeLay, Larry Mica and Curly Young care?

This column originally appeared at

Copyright © 1993-2004 by Joe Brancatelli. All rights reserved.