CLINTON’S INDUSTRIAL POLICY : Getting an Earful on Ailing Airlines : Transportation: Clinton hears a variety of views from industry leaders during hourlong meeting.

The leaders of the nation’s airlines finally got a chance to meet with President Clinton to talk about what ails their industry and how to solve those problems.

It was clear that the solutions will not come easily.

In an hourlong round-table meeting at Boeing Co. offices near Seattle, Clinton on Monday heard a variety of often contrary points of view about what’s wrong and what the government should do to help.

The conflicts might complicate the Administration’s effort to take a more active role in sorting out the airlines’ problems, which have resulted in $10 billion in industry losses since 1990 and tens of thousands of layoffs.

The problems have spilled into other industries, such as aircraft production, which has seen billions of dollars worth of new orders canceled or postponed.

“Different players want different things,” said transportation analyst Harold Sirkin at the Boston Consulting Group. “The smaller carriers want the larger carriers regulated because they exert a lot of influence in the system. The large guys are concerned about the small guys. The concerns are conflicting.”

In the informal meeting organized by the Clinton Administration, United Airlines Chairman Stephen M. Wolfe identified his three main concerns as:

- U.S. airline access to restricted foreign markets.

- The impact of bankruptcy laws on the airline industry.

- The release of aviation tax funds for use in airport and aviation improvements.

But Southwest Airlines--the only major airline to turn a profit last year--said the fundamental problem was that most airlines’ costs exceeded the price people were willing or able to pay.

The main solution, said Southwest Executive Vice President John Dennison, would be tax or regulatory relief combined with more cost-cutting on the part of the airlines.

“There was no intent in this session to derive a consensus,” said Northwest Airlines President John H. Dasburg, who proposed refunding a portion of federal ticket taxes to help unprofitable airlines. “After a participant raised a subject, it was likely that the next participant would raise a different subject.”

After playing a hands-off role since airline deregulation more than a decade ago, government interest in the industry has grown as conditions have worsened. Last week, the airlines’ financial difficulties were the subject of congressional hearings.

Congress is also moving toward creating a national commission to study the industry’s problems and recommend solutions within 90 days.

But what role government should play in the industry has also met with sharp disagreement. While airlines still want a minimum of regulation, some government leaders have talked about restricting fares within a “zone of reasonableness” that would set a floor and ceiling on prices.

Some problems are beyond the government’s help, airline industry consultant John J. Cala said.

“The airlines are unable to generate enough revenues to cover their costs,” he said. “Some of that may be driven by the government, but a lot of it is controlled by the airlines, and they will have to address those issues.”

Even with the government’s help, solutions will not please everyone.

Major airlines, for instance, blame carriers operating under Chapter 11 federal bankruptcy protection--such as America West or TWA--for sparking costly fare wars that depress prices. But while affording ailing airlines less protection in bankruptcy courts--and possibly forcing them out of business-- might boost industry profit, there would be other costs involved.

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“That puts people out of work, reduces the number of competitors and probably will cause fares to go up,” Sirkin said. The commission “has an incredible set of social policy challenges.”

Besides stirring a commotion domestically, Clinton’s interest in the airlines could also make waves abroad if he supports their contention that they face unfair foreign competition. Clinton has already stirred up controversy by attacking foreign governments for unfairly subsidizing Airbus, the European aircraft manufacturing consortium.