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EQUIPMENT LEASING INDUSTRY LAUDS DIRECTION OF AIRLINE COMMISSION RECOMMENDATIONS

 ARLINGTON, Va., Aug. 20 /PRNewswire/ -- The industry that has one of the largest financial interests in the health of the U.S. airline industry has lauded the direction of the recommendations of the National Commission to Ensure a Strong Competitive Airline Industry. The report, which President Clinton formally received Aug. 18, makes recommendations for returning the airline industry to a financially healthy competitive position. Aircraft lessors, major partners with the airlines, have 2,155 aircraft under lease and made investments in excess of $17 billion for aircraft acquisitions worldwide through lease finance in 1992 alone. Fifty-eight percent of domestic operating aircraft is leased.
 "We are pleased with the direction of the commission's report, because it recommends the airline industry continue to be market- driven," said Michael J. Fleming, president of the Equipment Leasing Association of America (ELA). "The bottom line is that, after a preliminary review, we find the recommendations supportive of and fitting for a healthy airline industry."
 Essentially, the commission recommended fine tuning existing laws and regulations without establishing government subsidies or financial guarantees. This is the strategy that ELA recommended in a paper it filed to the commission on June 4. "The industry particularly applauds the commission refraining from recommending that the government directly intervene in the airline industry's finances," said Fleming.
 The commission reached three basic conclusions, which were in accordance with the recommendations ELA made in its paper. The conclusions were: "For this country to prosper in a global marketplace, 1) the U.S. air transportation system must be efficient and technologically superior; 2) have the financial strength to respond to rapid change and opportunity; and 3) efficiently move people, products and services to markets."
 The commission also recognized the necessity of AMT relief for aircraft and of clarifying bankruptcy laws. The commission "took very seriously" its charge to examine tax policy and the many fees imposed on the industry. The commission stated "we believe there are several tax provisions that impede the ability of the industry to return to financial health." One of the recommendations is amending the AMT so that airlines and other capital intensive industries are not forced to pay taxes at a time when they report losses.
 As for bankruptcy, "there is little question that comprehensive bankruptcy code reform is overdue," said the commission, and it "urges Congress to begin such a review promptly." In addition, the report states "clarification of provisions in the bankruptcy code with respect to aircraft leases" is necessary and that "lessor concern about potential impacts of bankruptcy on their leases should be allayed."
 "We are pleased the commission's recommendations acknowledge that certain tax provisions now in place have had a negative impact on the industry," said Fleming.
 The government, said the commission in its report, "must exchange data and information with industry in a more timely manner and that Congress and the Department of Transportation (DOT) must be better informed about the regulatory burden their proposals add to the mix."
 Said Fleming: "The government must realize the tremendous regulatory and financial burdens it places on the airline industry and yet fails to recognize the need for more financial resources."
 The air transportation system, the commission recommends, must be an "open and comprehensive multi-national regime that has as broad a geographic base as possible and that allows people and products to move freely and efficiently." Given that worldwide 42 percent of all commercial jet aircraft is leased, the equipment leasing industry praised the commission for its global foresight.
 "We look forward to holding more dialogues with the appropriate people as the commission's report is reviewed," said Fleming. ELA will continue to study and monitor the commission's recommendations as they are discussed by the president, transportation secretary and Congress.
 The Equipment Leasing Association of America (ELA), headquartered in Arlington, is the non-profit trade association representing equipment leasing, which, in 1993, is estimated to be a $126 billion industry. Equipment leasing represents approximately one-third of all business investment in equipment. The association provides programs and information to the membership, assists in the resolution of industry issues and promotes high standards of business practices within the industry.
 -0- 8/20/93
 /CONTACT: Suzanne Jackson, director-communications, Equipment Leasing Association of America, 703-527-8655/


CO: Equipment Leasing Association of America; National Commission to
 Ensure a Strong Competitive Airline Industry ST: Virginia IN: AIR SU:


DC-TW -- DC022 -- 8746 08/20/93 17:10 EDT
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Date:Aug 20, 1993
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