Tax May Dim Mileage Awards
     Chicago, IL - Both travelers and the travel industry seemed to
 be caught off guard earlier this summer when Congress passed, and
 President Clinton signed into law, the first federal tax on frequent
 flier programs.
     But that was then. The issue has received enormous publicity
 since and there are signs the fight it stirred up is far from over.
     Among other things, there may be a move in Congress to repeal
 the tax; there could be legal action to stop it from being levied
 Oct. 1 as scheduled; and the airline industry may yet try a trick
 or two of its own.
     Petersen said opponents of the tax were canvassing members of
 Congress to gauge support for a repeal, and were waiting for word
 from the Treasury on how aggressively the government plans to
 implement the levy.
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  Assembly Line Bolstered with 200 Workers Boeing Scrambles on Delivery
     Seattle, WA  Aug. 28 - Boeing Co. is shifting workers to its 747
 assembly line in an effort to maintain increased production schedules
 but could miss delivery of two jets before the end of the year, com-
 pany officials said Wednesday.
     About 200 workers will be shifted from the 767 production line
 to beef up capacity at the nearby 747 line, which has been hurt by
 increased demand, parts shortages and an influx of inexperienced
 workers, said company spokesman Doug Webb.
     Both assembly lines are located in the company's massive manu-
 facturing facility in Everett, about 30 miles north of Seattle.
     Webb said the problems on the jumbo jet line and the shift in
 workers could result in the company missing its scheduled delivery
 month for one 747 and one 767 this year.
     Sales at Record Levels -- Boeing is scheduled to deliver 43 of
 the twin-engine 767s and 46 of the jumbo 747s this year.
     "Our customers have made the decision to buy our high-quality
 aircraft in record numbers," Boeing commercial airplane group Presi-
 dent Ron Woodard said in a statement.
     "Our challenge is to deliver these airplanes on schedule as
 promised."
     To meet rising demand, Boeing has doubled monthly production of
 the 747 to four from two in mid-1996, and production is scheduled to
 rise further to five a month by April 1998.
     No Altering Production Goal - Company spokeswoman Leslie Wilder
 said Boeing still expects to meet that goal.
     "We'll evaluate that as the line gets
 healthy again," she said.
     Webb said Boeing is looking at a variety of ways to improve 747
 production including the possibility of bringing up workers from
 California plants acquired in the merger with McDonnell Douglas Corp.
 completed this month.
     "We're looking at all possibilities," he said. Any proposed
 movement of workers would require the company to consult with its
 unions, he said.
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       Flights Suspended Indefinitely -- Air South Goes Bankrupt
     Columbia,  SC,- Aug. 28 - After three troubled years in the air,
 Air South filed for bankruptcy court protection from its creditors
 and suspended flights indefinitely Thursday.
     The discount airline, serving 10 cities mostly in the Southeast
 with seven planes, stopped flying at 4:15 p.m. EDT when the bank-
 ruptcy petition was filed, said marketing vice president Tom Volz.
     There is "no protection for passengers holding tickets from Air
 South," he said. No estimate was immediately available of how many
 ticket holders were affected.
     The airline carried about 4,000 passengers a day on 48 flights,
 Volz said. He did not know how many planes were in the air or where
 they were headed when operations were halted.
     Customers were advised to seek refunds through their travel
 agencies or credit card companies, or to call Air South after
 Sept. 4.
     Flights Aborted - Brian Robinson said he had waited at Columbia
 Metropolitan Airport since 7 a.m. for a flight home to New York
 City. He finally boarded at 12:30 p.m., but the plane turned around
 in the air and came back because of technical problems, passengers
 were told.
    "All they said they could do is send us on a bus back to Atlanta.
 They weren't very nice," Robinson said. Passengers would have to pay
 their own way, he added. The airline has been trying to renegotiate
 the terms of its leases on five of its planes and get better terms
 on $12 million it borrowed from the state to get started in mid-
 1994.
     Air South's bankruptcy filing said it has at least $67.4 million
 in liabilities and about $11.5 million in assets. The company said
 it has laid off more than 700 employees because it could not meet
 payroll.
     Try to Fly Again -- President John Affeltranger said the airline
 would try to fly again, but "it will be anywhere from several weeks
 to a month" before a plan is in place.
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