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Department of Transportation
Sets Procedures for Remaining Carrier Payments
October 25, 2001

The U.S. Department of Transportation (DOT) today announced procedures for air carriers to use in applying for the additional compensation available under a program to compensate airlines for their losses resulting from the Sept. 11 terrorist attacks.

The Air Transportation Safety and System Stabilization Act, signed by President Bush on Sept. 22, provided $5 billion in direct payments to carriers to assist them in recovering from financial losses sustained as a result of the attacks. The department moved quickly to distribute nearly half of this amount to carriers, and to date has provided nearly $2.43 billion to 111 carriers.

Under the rule announced today, the department will distribute up to a total of 85 percent of the compensation for which a carrier is eligible under the act, including any funds already provided. Procedures for distributing the remaining funds will be issued at a later date.

In order to be eligible for payments, carriers must report financial data that includes their losses between Sept. 11-30 and estimated losses for the rest of the year. The department is making these payments in stages in order to assure that all carriers are paid according to the law and that no carrier is overpaid.

The act requires compensation to be paid to carriers based on the lesser of the direct and incremental losses attributable to the attacks, or a formula amount based on a carrier’s proportionate share of reported available seat-miles (for passenger flights) or revenue ton-miles (for cargo-only flights). Up to $4.5 billion will be provided to passenger carriers and $500 million to all-cargo carriers.

This direct compensation is distinct from the $10 billion in loan guarantees authorized by the act.

Carriers must file applications within 14 days of the rule’s publication in the Federal Register, except air taxis, which must file within 28 days. The public may also comment on the rule within 14 days of publication.

The rule may be obtained via the Internet at http://www.dot.gov/. In addition, comments on the rule may be obtained at http://dms.dot.gov/, docket number OST-2001-10885.

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