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LOU DOBBS MONEYLINE

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Aired November 12, 2001 - 18:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is LOU DOBBS MONEYLINE for Monday, November 12th. Here now, Lou Dobbs.

LOU DOBBS, CNN ANCHOR: Good evening, Two months and one day after the worst terrorist attacks ever against the United States, a jetliner this morning crashed in New York. And a U.S. Airways flight bound for Pittsburgh has been diverted to Dulles Airport by sky marshals, we are told because of unruly -- an unruly passenger. We will have the latest details for you on that as they become available.

This morning, American Airlines Flight 587 crashed into a residential area of New York City. The plane had just taken off from John F. Kennedy International Airport, killing everyone aboard. We'll have a live report for you from you the scene.

The cause of today's crash is not yet known as of now. It is being investigated as an accident. But the crash did raise new concerns about airport security. We'll tell you what has and has not been done to make flying safer.

And could the Clinton administration have done more to have stopped Osama bin Laden? We'll be talking with former Secretary of State Madeleine Albright.

And today's airline tragedy sent stock prices this morning falling. By the session's end, the markets had recovered most of their losses. However, the airline industry may not see a recovery for some time to come.

American Airlines is expected to hold a press conference in just about 25 minutes at John F. Kennedy Airport. We will be bringing that to you live as it happens.

Right now, we're joined by Peter Viles from Rockaway Beach in Queens, New York, where today's American Airlines jetliner crashed.

Peter, what can you tell us?

PETER VILES, CNN CORRESPONDENT: Lou, this is a recovery mission at this hour and a very grim one: 255 people, passengers and crew, aboard that plane. We are told there are no believed survivors: 161 bodies have been recovered from the crash site, the main crash site about three blocks over my left shoulder. There were several other smaller sites around this area, Rockaway, where other parts of the plane fell.

Six are missing on the ground. No confirmed fatalities on the ground, but six as of yet unaccounted for. Another 30 on the ground suffering minor injuries. But we should say they still believe there's no one who survived from the plane itself.

At least, 12 homes were hit by the main part of the plane that fell, or portions of it, four of them destroyed.

Now, the mayor when he raced here this morning and got here said that the scene he saw here was not nearly as bad as what he was bracing for. Here is what the mayor of New York said earlier today.

(BEGIN VIDEO CLIP)

MAYOR RUDY GIULIANI (R), NEW YORK: When it was originally described to us and we were rushing out there, the police commissioner and I thought it would have been far worse than this. When we went up in the helicopter and saw it, it was amazing how the plane just landed in one small defined area as opposed to hitting a number of homes.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

GOV. GEORGE PATAKI (R), NEW YORK: Literally within five or 10 yards of where it appears the plane had its greatest impact, the telephone lines are still intact, so that it's clear that the plane did come down very much in a straight level, which was horrible for that particular site but minimized what could have happened had the plane glided across the Rockaways.

(END VIDEO CLIP)

VILES: Lou, the Rockaway Peninsula is almost like a barrier island that sticks out from the shore of Queens, and it's only a few miles from JFK Airport. And it is very, very heavily populated.

The area around here, the streets are a grid system just like New York and chock-a-block full of houses. Planes above, a very common site. But on this day, as you walk the streets, as these fires were still burning where the plane had fallen, almost everyone seemed to have a story of hearing these planes go down, or in many cases actually witnessing what happened in the sky, what happened on the ground.

Let's listen to some of those eyewitness accounts from earlier today.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I see top, I was at the top of the roof, and I see the plane, the engine fall down, and the plane fall. The piece (UNINTELLIGIBLE) and (UNINTELLIGIBLE) all the way down.

(END VIDEO CLIP) (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I -- I saw a very distinct orange explosion, and I think I saw part of or the whole wing fall. And then the airplane just arced directly down into the -- into Rockaway, where I live.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I heard this tremendous explosion and I looked out the kitchen window, and I seen a lot of papers and debris flying through the air. And next thing I heard about a few seconds later, a tremendous explosion where the plane must have crashed.

(END VIDEO CLIP)

VILES: Now, the obvious question here on the ground in Queens -- and I'm sure throughout the United States tonight -- what brought these planes down. Was it an act of sabotage? Perhaps even terrorism?

I'll tell you that every official who came to the microphones today here in Queens -- that was the mayor, the governor, Senator Clinton, FEMA director Joe Allbaugh -- all sounded the same theme, which was, we don't know, we have to wait and see, we have to investigate this and find out exactly what happened, but we should not assume that this was an act of terrorism. Joe Allbaugh, the head of FEMA, said he hoped, he hoped it would turn out to be an accident. He said he felt somewhat awkward saying that, but he did feel that that was a best hope that this is an accident.

Should also tell you that in the minutes after this plane went down, the city of New York went into a virtual lock-down. All the bridges, tunnels and airports were shut down almost immediately. All of those bridges and tunnels have been reopened, and most of the airports as well -- Lou.

DOBBS: Thank you very much, Pete, and of course the FEMA director echoing the wishes for most of us. A reminder that the National Traffic Safety Board is leading this investigation and already one black box from the aircraft has been found.

The president today offered his condolences to the families and victims of the crash. The president also promised New York federal aid.

John King joins us from the White House with more -- John.

JOHN KING, CNN CORRESPONDENT: And Lou, at this hour tonight, administration officials telling us that they do not believe, they have no evidence, they say, of any terrorist activity. Their operating assumption at this point is that this is an accident. But the White House also being very cautious, saying it cannot rule anything in or anything out until investigators know more about the causes of the crash in New York. Federal teams on the scene already.

As you noted, the president voicing his condolences today. He had a meeting in the Oval Office with the former South African President Nelson Mandela. Mr. Bush was not scheduled to appear in public today, but he and Mr. Mandela, as you see here, came out of the Oval Office into the Rose Garden, Mr. Bush noting that for the second time in just over two months tragedy striking New York. And he had to pick up the phone and voice his condolences to Governor (sic) Rudy Giuliani and Mayor (sic) George Pataki.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We sent our FEMA teams over. The FBI is over there. And this investigation is being led by the National Transportation Safety Board to make sure that the facts are fully known to the American people.

The New York people have suffered mightily. They suffer again, but there's no doubt in my mind that New Yorkers are resilient and strong and courageous people and will help their neighbors overcome this recent incident that took place. And may God bless the victims and their families.

(END VIDEO CLIP)

KING: Now Mr. Bush was in a National Security Council meeting when he received word of the crash. In the moments immediately after it, the Pentagon scrambled fighter jets nationwide to patrol the skies over the United States, both the Atlantic and the Pacific coastlines. There was a debate within the administration over whether to shut down the entire air traffic system across the country. In the end, based on early reports from New York, the administration decided not to do that.

Again, the assumption this evening is that this was an accident, but White House officials saying, given the environment we are in, it is not safe to assume anything. That is why they are taking a very cautious approach here at the White House as the president continues to receive updates on the early stages of the investigation -- Lou.

DOBBS: And John, as the White House takes that cautious approach, the National Transportation Safety Board moving very quickly, FEMA moving very quickly, as well, of course, the local authorities. And just as we were coming on the air tonight, that US Airways aircraft diverted on its way to Pittsburgh to Dulles. What can you tell us about that?

KING: A reminder, Lou, of the new security environment we do live in. It was a US Airways Flight 969 from Pittsburgh scheduled to land at Reagan National Airport, instead diverted at the request of sky marshals aboard that flight to Dulles International Airport. US Air officials telling us an unruly passenger aboard the flight. No details as to the incident, as to whether any threats were made or any weapons involved. Those details still not available.

But the sky marshals on every flight into Reagan National and most flights in the United States right now have the authority to do that. In this case, US Air is saying there was an unruly passenger on the plane, so the sky marshals ordered that plane diverted from National to Dulles Airport.

We'll try to get more details in the hours ahead.

DOBBS: Great. John, thanks very much. John King reporting from the White House. And as John said, we will be bringing those details to you just as soon as they are available.

The United Nations today in a partial lock-down for some time after the crash of the American Airlines jetliner. Delegates there were preparing to meet. The discussion, global terrorism, and to discuss the formation as well of a post-Taliban government in Afghanistan.

Richard Roth at the United Nations -- Richard.

RICHARD ROTH, CNN CORRESPONDENT: Lou, this building was already on high alert with unprecedented security here, with delegates being frisked and sand trucks being established on 1st Avenue in front of the U.N. It was a General Assembly high-level debate already delayed because of the terror attacks of September 11th.

The plane crash occurred right in the middle of the third day of debate.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: A minority under Greek Cypriot...

UNIDENTIFIED MALE (over loudspeaker): This is the chief of security of the United Nations. I would like (UNINTELLIGIBLE) that an American Airlines flight has crashed in Queens. At this time...

(END VIDEO CLIP)

ROTH: The Turkish foreign minister eventually went on with his speech, offering his condolences. The crash and the building security alert occurred right during an incredibly important Afghanistan meeting attended by U.S. Secretary of State Colin Powell, who was delayed by a security cordon put on the building. All cars and all pedestrians were not allowed to come in. Powell eventually, about 15 minutes late, attended the session here. The U.N. security eventually, lifted that lock-down, and people could come in and out of the building.

Inside, the Security Council diplomats stood in a minute of silence.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: On this sad occasion, I invite all the participants of this meeting to rise and observe a minute of silence.

(END VIDEO CLIP) ROTH: Once again, for an airplane disaster in New York countries offered expressions of sympathy and support, delegations from France to China with that -- Lou.

DOBBS: Richard, thank you very much. Richard Roth reporting from the United Nations.

Well, as New York City dealt with yet another air tragedy, anti- Taliban forces in Afghanistan are making dramatic gains. The Northern Alliance today captured the key city of Herat. Those troops have now broken through Taliban front lines and have pushed to within a few miles of Kabul, according to the latest reports. But leaders say they will not try to enter the capital city at this time. That, of course, in part at the request of the president of the United States.

The fierce battle in Herat reportedly left 20 Taliban soldiers dead, and Taliban troops are said now to be fleeing Kabul as the opposition forces advance on the city.

The nuclear-powered aircraft carrier USS John C. Stennis is on its way to the Arabian Sea. The Stennis will join three other aircraft carriers near the coast -- in the region. The carrier will conduct air operations, of course, against targets in Afghanistan.

Well, as the military campaign continues tonight in Afghanistan, increased attention is being paid to a post-Taliban governments. The president has made it clear this weekend that he does not want Northern Alliance forces to take the capital of Kabul until a political solution can be found. And joining us now to discuss that is the former secretary of state, Madeleine Albright. Good to have you here.

MADELEINE ALBRIGHT, FORMER U.S. SECRETARY OF STATE: Good to be with you, Lou.

DOBBS: Your impressions on the -- what seems to be an extraordinarily rapid advance over the last several days by the Northern Alliance forces.

ALBRIGHT: Well, I think it's obviously very important and shows that the military aspect of this operation is working well, that our alliance air forces have done a good job, and that this is a very important advance. But I think we all know that this is a long story, and as the administration has said to us many times, this is going to take a while. And it isn't just military. It's also diplomatic, dealing with our alliance partners, and then setting -- helping to have this Taliban, post-Taliban government set up.

DOBBS: Of the complications, of the difficulties that could face the president here, asking the Northern Alliance to remain outside Kabul is probably the most attractive. Do you think it's going to be something that the Northern Alliance will honor?

ALBRIGHT: I think that they have managed in the last few days to get along better with each other and be more coordinated and more coordinated with our advisers. I think that they probably won't want to wait for too long, but that's why the meeting that was shown that Secretary Powell went to is so important. We have those meetings. They're called the six plus two, U.S. and Russia plus the neighbors, trying to figure out with the United Nations some kind of a post- Taliban regime.

DOBBS: And what -- what character do you think it will assume?

ALBRIGHT: Well, the important part is for it to have representatives of the Pashtuns, the southern group...

DOBBS: The largest ethnic...

ALBRIGHT: The largest ethnic group. And obviously, all this is taking place in the north physically as well as the Northern Alliance. So the question is how to get Pashtuns that are not Taliban, or radical Taliban, into it, and I think that is a huge challenge for everybody.

DOBBS: And as you say, it's a difficult challenge, but at this point, how would you say things are going from your vantage point?

ALBRIGHT: Well, I think -- I think they're going better clearly, and I think that it has shown that patience has paid. People who were critical of the military aspect of this a few days ago should rethink. And we just have to be more patient.

DOBBS: Some of the national media were effectively calling for General Franks' head because he had not conquered Afghanistan in something less than 30 days.

ALBRIGHT: Well, they clearly were wrong, and I think that having lived through this ourselves, when air campaigns don't work as quickly as people think, we did in Kosovo. And I think that we need to have faith in our military as they pursue what is clearly a difficult campaign.

DOBBS: And how do you react to a former colleague in the Clinton administration, Richard Holbrooke, basically saying in effect the Bush administration had the wrong messengers sending the wrong message in all of this? Do you have any reaction to that kind of statement?

ALBRIGHT: Well, I don't know to what he was particularly referring, but I think that we need now very much to work with those on the ground, the Northern Alliance. We need to work with the allies. I did favor, I do favor the military aspect of this. But I think we also have to look at the diplomatic parts.

And then what is now most important -- I was fascinated by this report in terms of people starting to live again in various cities in Afghanistan, and we have to do everything we can to support the Afghan people, who after all are as much victims of this as we are.

DOBBS: OK. Madeleine Albright, always a pleasure. Thanks.

ALBRIGHT: Nice to be with you. DOBBS: Just ahead, we'll have the latest for you on the crash of American Airlines Flight 587. Investors -- investigators tonight are examining the plane's cockpit voice recorder, looking, of course, for the cause of this tragedy. Today's crash unnerving an already jittery flying public. We'll take a look at what this means for the airline industry and who should be held accountable for airport security. We'll take a look at what's being done to make flying safer and to hold those responsible for airline security accountable. That story is next.

(COMMERCIAL BREAK)

(JOINED IN PROGRESS)

GIULIANI: ... stabilizer that was in the bay, an engine that fell down next to a gas station, another engine that came down about four blocks away, and then the main part of the airplane, which fell on six houses which have either been totally destroyed or in good part destroyed, and then another six that have been damaged. And right now, we believe that there are six people, possibly as many as eight, that are unaccounted for on the ground.

And we're doing the best we can to try to identify as many of the bodies as possible. The medical examiner, who has been under tremendous stress in handling the World Trade Center, has organized this effort again and seems to have organized it really very, very professional. So we're hopeful that we can assist these families in identifying their loved-ones as quickly as possible. I don't know if we can do it with every single one, but we'll try as best we can.

QUESTION: Mr. Mayor...

GIULIANI: And governor -- the governor has a statement.

PATAKI: If I may make a couple of comments, we have had a chance again to spend some time with the families, and our hearts and prayers are with them. The mayor and I had a chance earlier to talk to President Mejia of the Dominican Republic, and he expressed his condolences and we also let him know of our concerns for the loss of so many Dominicans.

There will be a candlelight vigil tonight at 8 o'clock for the victims on 163rd street and Amsterdam Avenue in Washington Heights, with many of the leaders of the Dominican community to express our sorrow over this loss.

Tomorrow morning 10 o'clock the Javits Center will be open as the family center, so those who have not gotten here yet but are looking to come to New York to register and to find all the information they can should go to the Javits Center tomorrow morning.

The Port Authority has completed its check of the fuel that was in the plane and similar planes, and the fuel check has been negative, meaning there are no problems with the fuel.

Following conversations with federal officials and others, based on the checks that have been done so far, the airport, Kennedy will be reopening for outbound flights at 6:30.

We also have looked at other aspects of the fuel, including the reports of dumping that came earlier from the JTTF. They are now conflicting reports, and it's inconclusive, so we won't have any determination, if any time, until perhaps the flight data recorder would indicate conclusively.

So the airport will be reopening at 6:30 for outgoing flights, and again our thoughts and prayers are with the families of those who lost loved-ones on this flight, and certainly also with American Airlines for all of the losses that you have suffered. And thank you for bringing in, along with you, Don, all of the caregivers, the professional support teams to help the families get through their grief.

(CROSSTALK)

DON CARTY, CHAIRMAN & CEO, AMERICAN AIRLINES: Thank you, Mr. Mayor, and thank you, Governor. Well, it's a sad and a tragic day for us in American Airlines and for the city of New York. And I want to express my deepest sorrow and sympathies to the families of our passengers and our employees who were lost today and to those missing here in New York.

I will be meeting with families later today and tomorrow to convey my thoughts personally to all of them. I arrived, as the mayor said a few moments ago, from Dallas/Fort Worth with 60 American Airlines employees, member of our care team to assist families touched by this tragedy. And this group is part of a group of some 560 specially trained care team employees -- many of them, I might add, Spanish-speaking -- which were activated from around the American Airlines network.

And in addition to the care team that we have here in New York, another team is already in Santo Domingo drawn from Spanish-speaking employees based in Miami, San Juan and throughout the Caribbean.

The care team and American Airlines employees will make sure that we are a company doing everything that we know how to do to help the families during this time.

Now in addition to activating the care team, let me review just a couple of things we've already done. We've activated a toll-free number for the families seeking information, assistance, and that number is 1-800-245-0999. And as of 4:30 this afternoon, we had already received 25,000 calls on that number.

Now, earlier today we had forwarded a list of the passengers on Flight 587 to the National Transportation Safety Board, and for the past several hours we've been contacting family members of those that were on board. And once we've made those notifications, we will with the approval of the NTSB release the passenger name list.

We'll be offering immediate financial assistance to the families, and that assistance will, of course, be coordinated by our care team members. I have been personally in touch with the White House and federal authorities and the authorities in Santo Domingo to coordinate the responses and the investigation. And here in New York, I just want to again express my appreciation to the mayor and the governor and their staffs for all of their personal involvement in this very, very difficult situation.

I would also like to recognize the emergency personnel that work with them for responding so quickly on the scene.

Now, I have no information at this stage on today's accident. The NTSB indicated earlier -- and I think all of you have heard this -- that it is investigating the loss of 587 as an accident. American Airlines is, of course, fully cooperating with the NTSB, and we will provide any information that we get as quickly as we can from the NTSB.

And obviously, given the changed world that we all live in today, it is perhaps more important than ever that we all understand as quickly as we can what the causes of today's circumstances were.

Now it may go without saying that the nation, New York City and American Airlines have been through an awful lot over the past few weeks. The pain of another significant loss is obviously enormously, enormously hard for all of to us accept. But we will collect the energy and the spirit to do what we can to support these families. And on behalf of all of the people of American Airlines, that's what I'm here in New York to do.

Thank you.

QUESTION: Mr. Carty, do you think (OFF-MIKE) this morning?

CARTY: We did. This flight is an international flight. It was subject to a bag-match program and a bag-inspection program, and all of those procedures were in place. And our review suggests they were carried out precisely as we and the FAA have agreed to do.

QUESTION: Who does your security?

QUESTION: (OFF-MIKE) actual (OFF-MIKE) at Kennedy Airport (OFF- MIKE)?

CARTY: The EDS machines at Kennedy this morning were operative and were used.

QUESTION: What (OFF-MIKE)?

CARTY: All of the things that you've seen put in place in the last few weeks were in place, have been in place, and were certainly in place this morning.

QUESTION: (OFF-MIKE) starboard engine?

CARTY: I really, with all due respect, I cannot comment on the investigation. It is an NTSB matter. You'll have to turn to them as we uncover all -- as we collect and put together all of the data that will come out of the inspection and the investigation of the accident site.

QUESTION: Is there any history -- is there any history of engine failure on an aircraft of this type ever?

CARTY: I haven't got any data on that. As far as I know, at this moment, I'm not aware of one.

QUESTION: (OFF-MIKE)

CARTY: There's inspections of every airplane every night.

QUESTION: (OFF-MIKE)?

CARTY: I have no such report at all.

QUESTION: (OFF-MIKE) spokesman today said (OFF-MIKE)?

CARTY: An A-check is virtually a daily inspection. It's not quite daily, but it's virtually daily.

QUESTION: (OFF-MIKE)?

CARTY: None consequential. There was a tire change and a couple of other minor things in this aircraft. That's it.

QUESTION: Was this the first flight since that check?

CARTY: No. This is not the first check -- first flight since that check. Last night, the airplane -- and I meant to say this. The tire check I referred to occurred last night, not on the A-check, and that was really all that was done to the airplane.

QUESTION: (OFF-MIKE) on the runway (OFF-MIKE) about an hour. Was there any reason why it was delayed for that hour?

CARTY: It was delayed at the gate, as so many airplanes are since the 11th, largely to ensure that the security requirements were fulfilled. And as I said a moment ago, they were. It was a security delay, coded as a security delay.

QUESTION: (OFF-MIKE) was that a normal security delay?

CARTY: Normal security -- normal security delay following the processes that we and the FAA have put in place.

(CROSSTALK)

QUESTION: (OFF-MIKE) black box (OFF-MIKE) the other box?

QUESTION: What is the immediate financial...

QUESTION: Other black box?

CARTY: Pardon me? QUESTION: (OFF-MIKE) update on the other black box (OFF-MIKE)?

GIULIANI: There is, as far as we know, only one black box has been located, although there is a report that a second one is located, but we can't confirm that. That's what we were trying to confirm.

QUESTION: (OFF-MIKE)...

GIULIANI: The -- the data recorder has been recovered -- that was sometime early this afternoon -- and sent down to Washington. It's the second black box that we're talking about, and we're not able to confirm that that's been actually recovered. Although there was a report that it was recovered, we can't confirm that.

QUESTION: (OFF-MIKE)...

GIULIANI: No. A report from somebody that said that it was recovered, but right now...

QUESTION: (OFF-MIKE)...

GIULIANI: We're just checking with the scene, and they don't have that information.

QUESTION: Excuse me, Mr. Mayor, from the Dominican Republic, you said before you spoke by the phone with President (UNINTELLIGIBLE) a couple of times today. I would like to know what kind of help you will be as the (UNINTELLIGIBLE) over new York with government, the Dominican government, for the families of the victims?

GIULIANI: The governor and I both spoke to him, and we offered all of the help that we can give. Many of the people here are Dominican nationals. Some are American citizens. You have both. So we'll work very, very closely together.

The Dominican ambassador is here. He's been here since early this afternoon. The consul general is here. A number of officials of the Dominican government are here. We want to make this as easy as you can make a terrible situation like this with regard to the identification of their loved-ones, the return of their loved-ones. We're trying very hard to organize this in a way that eases some of their burdens.

UNIDENTIFIED FEMALE: Last question please.

QUESTION: Mr. Carty, how old was the plane that crashed? How old was the plane?

(CROSSTALK)

QUESTION: How you can make them feel confident once again, about flying?

(CROSSTALK)

GIULIANI: Well -- Mr. Carty. CARTY: Well, I'd only say this: As is always the case in these circumstances, we will only all feel comfortable when the investigation is complete. I suspect the investigation will move ahead very, very quickly. It is a circumstance when -- where the airplane and the engines are recovered, where the flight data recorder is recovered. I think we will know an awful lot more in the next day or two, and I do think that it will give us some comfort.

QUESTION: How old was the plane? How old was the plane?

GIULIANI: How old was the plane?

CARTY: I think it was 17 or 18 years old. I'm not -- I can't be a hundred percent sure of that. Does that sound right?

Yeah, about -- yeah, about a midlife airplane.

QUESTION: What is the (OFF-MIKE)?

GIULIANI: Michael, do you want to pick up?

MAYOR-ELECT MICHAEL BLOOMBERG (R), NEW YORK: We've obviously experienced another great tragedy here, and the hearts of all New Yorkers go out to the families of those that we've lost. And we have to make sure that we conduct a thorough investigation, which is certainly being done, but I think the most important thing for the moment is that we comfort those who have lost their loved ones. Nothing will bring them back, but we have to remember them and do everything we can to take care of them.

UNIDENTIFIED FEMALE: Thank you.

DOBBS: You just heard Mayor-Elect in the New York City Mayor- Elect Michael Bloomberg. With him, the chief executive officer of American Airlines, Don Carty, of course, Governor George Pataki and Mayor Rudolph Giuliani extending their condolences and trying to impart as much information as possible at this early stage about today's crash of the American Airlines jetliner 587.

Today's tragedy, of course, is simply adding further pressure to an industry that is already near bankruptcy. Despite a $15 billion bailout package, many airlines tonight are struggling to avoid bankruptcy. Airline stocks sharply lower today. Investors fearing further drops in air travel.

Allan Chernoff now takes a closer look at an industry without question in jeopardy.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): Here's how bad things are in the airline industry. Excluding bailout money from Washington, airlines lost $4.2 billion in the three months ended September 30. That's about half a billion shy of the industry's worst year on record, 1992. JON ASH, GLOBAL AVIATION ASSOCIATION: This will be a terrible year of the industry. The industry has already lost about close to $5 billion. It will lose another close to $4 billion pre-tax before the end of the year. So we're looking at a year where pre-tax losses will be in the range of $9 billion.

The third quarter was particularly harsh for UAL, parent of United Airlines, U.S. Airways and American's parent, AMR. Airlines have been slashing expenses since September 11, cutting flights by about 20 percent, laying off 100,000 workers and delaying orders for new aircraft.

To bring passengers back, carriers have chopped fares. In October, traffic was down one-third to one-fifth from year-ago levels. Much better than September, when many planes were nearly empty. But still, the losses keep coming.

ERIC STEPHENSON, FITCH, IBCA, DUFF & PHELPS: Until the business traveler really returns in full force to pre-9/11 levels, you're going to see continued strain on the system and continued losses.

CHERNOFF: Analysts say it is very possible some major airlines will go bankrupt within the next year.

(END VIDEOTAPE)

Last week, the vice chairman of AMR, parent of American Airlines, said the key to our survival is going to be convincing the public that it is safe to fly, a task now even more challenging after today's crash -- Lou.

DOBBS: Without question. Allan, thank you very much. Allan Chernoff.

Well, a pessimistic outlook today for the airline industry as well from Boeing. Boeing CEO Phil Condit warning that it could take more than three years for the airline industry to recover.

Joining us now is airline analyst Ray Neidl. Ray, good to have you with us.

RAY NEIDL, AIRLINE ANALYST, ABN AMRO: Good evening.

DOBBS: This, without question, is going to cause some not to fly at all today, because no matter the fact that the early reports are that it is an accident, we're going to have to wait some time to find precisely what happened if past experience is any guide, correct?

NEIDL: That's correct. People were returning originally to traveling about three weeks ago. With the anthrax scare, traffic went soft. And what happened today is not going to help bring people back.

DOBBS: We have seen an extraordinary run up in stock prices. We have seen an industry require a $15 billion bailout. Allan Chernoff just reported a number of airlines on the verge of bankruptcy. Characterize for us, if you will, just how serious this is. NEIDL: Well, before today, my feeling was that we wouldn't really have any major airline bankruptcies in short term. And that was because of the government aid loan package.

DOBBS: Right.

NEIDL: The problem I was seeing for the industry, if they didn't change their cost structure, was a year or two down the road when this debt had to be serviced. Then they could have real problems. Now with the accident today, if it turns out to be an accident, I'm hopeful that the traveling public will get over it fairly quickly and we can get back to the more normal type of recovery.

DOBBS: We're asking the air travel public to get over an awful lot. Argenbright, the security firm, continues apparently to be a sieve. There seems no accountability. They paid a million dollars in fines. We're asking the traveling public to take it in stride, that at checkpoints people can walk through with a duffel bag full of weapons. I mean, at what point does the airline industry say enough is enough?

NEIDL: Well, you do have to get the public feeling confident in security. As long as you have these reports coming out, you're going to have problems. So that's the first step right now, get security down. Once that happens, then the airlines can offer price incentives to try and get people to come back.

DOBBS: The thing that frankly I don't understand at all is why the airline industry has not insisted that security be beefed up now. They have minimum wage employees. They've apparently refused to pay these employees an appropriate wage with appropriate training, to provide that security. And they say they'll take six to nine months to do it.

We have the President of the United States saying we're on a war footing. And the airline industry reacting in this way. Does that astonish you?

NEIDL: Well the airlines want to get out of the security business. And I think they should. They want the federal government to assume that task, which I think they should. And it's up to the federal government to decide how they want to do that.

DOBBS: The prospects for industry?

NEIDL: Very bleak right now. I don't see the industry getting back to anything close to normal into the third or fourth quarter of next year. And then, I think, when the industry comes back, it'll be a little bit smaller. And I don't think the airlines will be chasing every last body to fill up every last seat. I think you have an industry about 3 percent smaller than it was pre-September 11.

DOBBS: Only 3 percent smaller?

NEIDL: Well, yes, basically, if people start come back, I think the airlines will probably get 3 to 5 percent back to normal. DOBBS: Significant consolidation mergers?

NEIDL: That's a possibility down the road. If airlines cannot service the debt, you may have consolidation. I would prefer seeing airlines going out of business.

DOBBS: OK, Ray, thank you very much for being with us.

NEIDL: Thank you.

DOBBS: Still ahead here, we'll have the latest details for you on the tragic crash of American Airlines flight 587. Investigators have just begun the process of determining the cause of that crash. But today's tragedy has renewed concerns, as we said, about airport security. Tonight, we'll report, to you on what is being done, and not done, to make flying safer. Today's crash also putting GE's engine division in some focus and scrutiny again. We'll take a look at some of the problems those engines have experienced. And we'll be joined by the lead investigator in the crash of TWA flight 800. Stay with us.

ANNOUNCER: Next, Lou talks with Jim Hall, former chairman of the National Transportation Safety Board.

(COMMERCIAL BREAK)

DOBBS: Here are the latest developments in today's crash of American Airlines flight 587. Officials tonight are analyzing the cockpit voice recorder from the aircraft. Flight 587 went down three minutes after taking off from John F. Kennedy International in New York.

That flight, heading for Santo Domingo in the Dominican Republic. It crashed into a Queens, New York residential neighborhood. 251 passengers, 9 crew members have been confirmed killed. 255 bodies have been recovered. At least six people on the ground tonight are missing.

And late this evening, U.S. Airways flight 969 from Pittsburgh was diverted by onboard sky marshals from Reagan National to Dulles International Airport in Washington. That flight was rerouted because of an unruly passenger. We have no details yet on the nature of that disturbance.

There is no indication that terrorism caused the crash of flight 587 today. Authorities are treating this crash as an accident. And the National Transportation Safety Board is leading the investigation. One of the best clues to the cause of the crash, the cockpit voice recorder. That voice recorder, as I said, has been recovered.

And joining us now to take a look at what steps the NTSB will be taking is the former chairman of NTSB, Jim Hall. Jim, thanks for being here.

JIM HALL, FORMER CHAIRMAN, NTSB: Hi, Lou. Good evening. DOBBS: The National Transportation Safety Board seems to moving quickly here. How realistic is it to expect any kind of indication as to what caused this crash?

HALL: Well, I would hope if we get the flight data recorder and the cockpit voice recorder quickly, and are able -- they're in good condition and can be read out, that's our best, chance, Lou, to have an early indication of what happened to this tragic flight.

DOBBS: And what would be the first steps they take in the investigation?

HALL: Well, the first steps, of course, have already been taken. The board has sent a team of highly technical investigators to the accident site. They're designed, you know, divided up in many different disciplines. They will obviously already be working with the airlines to review the maintenance records, working with General Electric to look very closely at the maintenance history on the power plant, as well since that seems to be a possible issue. And reviewing all the air traffic control communications and any other information that they can glean on the site from people that had contact with the aircraft.

DOBBS: Jim, the NTSB has got to feel some incredible pressure to get to the cause of this crash as quickly as possible. Would you agree?

HALL: Well, there's incredible pressure, but we need to be sure the system that has served us so well works. And investigations take time. They need to be thorough. They need to be responsible. We can't be wrong. There's too many personal lives that have been lost here and obviously tremendous economic consequences. So there will be a lot of pressure on the board, but I'm confident the investigators will do their job as they have in the past. And that's thoroughly and responsibly.

DOBBS: The NTSB taking the lead on this investigation. Does that mean that the FBI effectively will not be in -- any co-lead role here?

HALL: Lou, that is sort of a miscommunication of information that many times the American people have. Anytime there's a major accident investigation, both the FBI and the NTSB initiate investigations. And that is what is happening in this situation. The difference, of course, is in this situation, because early indications are it is an accident, the board serves as a spokesperson and under the investigation is conducted under the board's rules and procedures. If at anytime, the board thinks that this is a result of criminal act, they will hand the investigation off to the FBI.

DOBBS: You know, of course, at any stage and certainly today has been no exception in a crash like this, the speculation begins as to what did cause it. But one of the things that is noteworthy here, without suggesting anything beyond this, is that the number of problems that have been experienced for this particularly-designed engine on the aircraft. Does that surprise you, the level of problems that they have had with that engine?

HALL: Well, I'm very familiar with that engine. We'd made a number of recommendations that regrettably, have not yet been completed -- implemented curing my tenure at the National Transportation Safety Board on the CF-6 engine. One of the things that I hope the aviation industry will do as part of the things that I think need to be done to regain confidence in the system after 9/11, is to look at all the outstanding NTSB recommendations and try to move quickly to fulfill those recommendations.

DOBBS: Any other thoughts on the situation tonight?

HALL: Well, no, except as you have pointed out, this is a tremendous tragedy, whether an aviation accident is a result of terror as we saw on 9/11 or an accident, as a result of a mechanical or human failure. It's a tremendous loss to the individuals. And of course, the families and loved ones are the ones that are in our thoughts and prayers tonight.

But we have, unlike security, Lou, a very good structure in place for safety. And I'm confident that structure will serve us well. And I know there'll be a great deal of pressure to have early answers, but I think the most important thing is to get the facts and report the facts to the American people just as soon as they're available.

DOBBS: Well Jim, as you know, the result of this investigation there will be no good answers, but at least some, perhaps not as bad as others. So we thank you very much, Jim, for being here with us.

HALL: Thank you.

DOBBS: Jim Hall.

Well, authorities saying there is no evidence pointing to terrorism in the downing of American Airlines flight 587. However, from Capitol Hill to departure gates at airports all around the world, the issue of airport security dominates. And today, the topic is revisited as an even more urgent matter.

Kitty Pilgrim has the story.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): How secure is it? That's what America wants to know, since September 11 in Chicago, a man carrying seven knives gets through. In New Orleans, a revolver found in a carry-on bag at the gate. Argenbright, the private screening company that handles 40 percent of all airport screening, let off the hook for lax security.

Last Friday, Argenbright canned their CEO, announced plans to security check their own personnel, and beefed up security procedures, putting two people to screen x-rays, hand searching any bag that has a non-transparent item. Argenbright's new CEO.

UNIDENTIFIED MALE: The first thing is we need good, high-quality stuff. We've started to raise the wages of those staff from an average of $6 to $8 to $9 to $13. That's already begun to have an impact in terms of the quality of the staff and the retention rate.

PILGRIM: Keeping and training workers is a problem. A General Accounting Office report found screening employees turnover rate is 126 percent. The reason, low pay and poor benefits. Jumal Aviv helped design the airport security system in Israel.

JUMAL AVIV: No one will blink an eye to spend $10 million on a piece of suitcase-scanning equipment, but most important behind every one of those pieces of equipment is the person who sits behind the screen. And in that area, they spend minimum wages. So you defeat the whole system.

PILGRIM: Some passenger advocacy groups want the government to take over the job, no matter how much it costs.

PAUL HUDSON, AVIATION CONSUMER ACTION PROJECT: I think the money is clearly there. The Congress has appropriated plenty of money for the war on terrorism and for bailing out the airlines at this point.

(END VIDEOTAPE)

PILGRIM (on camera): The federalization of the screening process is still a stumbling block. The House and Senate have been stalled on it for about a week. Both the House and Senate bill are in conference committee to reconcile differences. And the pressure is on to get some kind of new system in place -- Lou.

DOBBS: Let me ask you the question. Argenbright, still not being held accountable?

PILGRIM: They have made very drastic steps. A new CEO. They've upped the pay scale for their employees. They've made some significant steps. They are still not being, shall we say, blamed for the problem. It's seen as a bigger problem than that.

DOBBS: All right, Kitty. Thank you. Kitty Pilgrim.

The Airbus A-300 that crashed three minutes after taking off from JFK this morning was powered by two engines made by General Electric.

Fred Katayama now takes a look at the track record of those engines.

(BEGIN VIDEOTAPE)

FRED KATAYAMA, CNN CORRESPONDENT (voice-over): Part of the engines of American Airlines plane that crashed landed in the driveway of a home. Another part on a gas station. Such engine separations are rare. And it's never happened before to the General Electric engine powering the doomed twin engine Airbus.

DAVID FIELD, "AIRLINE BUSINESS MAGAZINE": There doesn't seem have been major charring or fire damage to the engine, which suggests that there was not an explosion within the engine core itself within the turbine, which suggests that something forced the engine and it's pylon off the wing.

KATAYAMA: The GE CF-6ADC2 is the workhorse of the GE fleet. It empowers more than 1,000 planes. Analysts say it boasts a strong safety record in its 17 years in service. One major incident involving the CF-6 did not occur in flight. The disk that holds the blades of the turbine in a U.S. Airways Boeing 767 cracked and ruptured during a ground run for maintenance last year.

A GE spokesman said the National Transportation Safety Board is still investigating that incident. Back in New York, the two engine on the American plane had a huge disparity in the number of hours flown, but experts say that's not unusual. And American Airlines had done maintenance checks as recently as last month. The NTSB is heading the investigation.

JIM MCKENNA, AVIATION EXPERT: They certainly will be looking at the location of the pieces of the engines, how many pieces there are, where they are, to get an early read on whether those engines left the airplane in flight, whether they left the airplane in pieces in flight.

(END VIDEOTAPE)

KATAYAMA: The chairman of the NTSB says it has polled maintenance information. And of the data examined so far, nothing indicates a specific problem -- Lou.

DOBBS: And tonight, we learned from Jim Hall, the former head of the NTSB, that he had made specific recommendations, however, about these engines. So Fred will be following up on this story throughout.

Fred, thanks. Fred Katayama.

Well here now the latest developments in the war against terrorism. Taliban forces tonight are on the run. They are reported to be fleeing from Kabul, the capitol of Afghanistan. Opposition forces closing in on the city within a matter of several miles of the city.

Earlier, Northern Alliance forces took control of the city of Herat, freeing prisoners, storming Taliban headquarters. Reportedly, 20 Taliban soldiers killed in those attacks. The nuclear-powered aircraft carrier USS John C. Stennis, on its way to the Arabian Sea. The Stennis will join three other carriers in conducting air operations against targets in Afghanistan.

Now turning to Wall Street. Stocks rebounding from initial losses, following the news of the crash. The Dow initially dropped 200 points, but ended down 53. The Nasdaq actually gaining by the closing bell. The S&P 500 dropping nearly two points on the day.

Coming up next here, oil prices firing lower, despite a planned cut in production. We'll be telling you why. And consumers already cautious following the terrorist attacks of September 11. We'll take a look at how today's plane crash could affect them.

(COMMERCIAL BREAK)

DOBBS: Economist Lakshman Achuthan believes consumer spending is the key to economic recovery. After today's crash, he says people will feel even less confident, of course, regardless of what is ultimately determined to be the cause of that accident.

Good to have you here.

LAKSHMAN ACHUTHAN, ECONOMIC CYCLE RESEARCH INSTITUTE: Good to be here.

DOBBS: Just when the airline industry seemed to be moving ahead, this crash. We heard Ray Neidl say that basically, this is a setback of enormous proportions for the industry. Phil Condit, the CEO of Boeing, saying it could take as long, even more than three years for the industry to recover. What is your best assessment?

ACHUTHAN: Well, for the industry or for the economy?

DOBBS: For its impact?

ACHUTHAN: For its impact? I'm concerned about consumer and consumer confidence, because we have lot of stimulus introduced into the economy. The consumer is holding it up a little bit. And the confidence is needed to release that into the economy. We had a cumulation of non-events. And of course today, we had an event that is going to weigh on confidence.

DOBBS: And business investment itself? Instead of putting all of this on the consumer's back...

ACHUTHAN: Right, well, the businesses have been on hold for a while.

DOBBS: Right.

ACHUTHAN: Because they -- there's a lot of capacity in the system. And they're unlikely to begin or to add to their capacity until they see the consumer coming back. That's why the consumer is particularly under the gun.

DOBBS: Looking at a number of these industries, but focusing on the airline industry, if we get a bankruptcy there, business spending remains in decline in point of fact. How likely is recovery next year?

ACHUTHAN: Recovery can still come, even if you have bankruptcy or further consolidation. This is what happens during recessions. The recovery will come, guaranteed when the consumer confidence comes back. That's key.

DOBBS: When's that happen?

ACHUTHAN: Not for the next three, four months, not there. DOBBS: OK. I think most people will sign up for that anyway. Thanks.

ACHUTHAN: Lou, sign up anyway.

DOBBS: Thanks.

Well, "WOLF BLITZER REPORTS" begins here in just a few minutes. Let's go to wolf now in Washington -- Wolf.

WOLF BLITZER, CNN ANCHOR: Thank you very much, Lou. We'll have a full hour of coverage on two major stories we're following tonight. The crash of American Airlines flight 587 and the dramatic developments unfolding on the battlefield in Afghanistan right now. Why did that Airbus A-300 crash this morning? Among my guests, the former vice chairman of the National Transportation Safety Board, Robert Francis. That and much more, all coming up next -- Lou.

DOBBS: Looking forward to it, Wolf. Thank you.

Coming up next here, we'll take a look at what you should expect tomorrow.

(COMMERCIAL BREAK)

DOBBS: Tomorrow, we'll have quarterly results from retailers Home Depot, Wal-Mart, JC Penney, William Sonoma and T.J.X. Companies. And also tomorrow, President Bush will meet with Russian President Putin at the White House.

For this Monday evening, that is MONEYLINE. We thank you for being with us. I'm Lou Dobbs. Good night from New York. "WOLF BLITZER REPORTS" begins now.

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