American Airlines has flirted with bankruptcy

The aid package is in response to complaints from airlines that the Iraqi war was causing an unprecedented collapse in ticket sales, at a time when major carriers were already weak.

Two separate proposals made their way through the legislature - a $3.2bn plan in the House of Representatives and a $3.5bn package in the Senate.

The White House called the price tag of each plan "excessive", and said it would work with both houses to hammer out a cheaper formula.

The administration of President George W Bush wants airlines to commit to more sweeping cost-cuts and restructuring measures before any aid is agreed.

Begging bowl

This is the second major injection of aid into the US airline industry in less than two years.

After September 11, Congress voted for a $15bn bail-out, which has been doled out on a case-by-case basis ever since.

Over the past 18 months, some 100,000 US airline workers have lost their jobs, as carriers struggled to keep going despite weak demand and higher operating costs.

Some in the government have been critical, however, of the fact that no major restructuring - in the form of a merger, for example - has taken place.

Administration officials have also questioned the extent of the current crisis, arguing that airlines may be exaggerating their plight in order to qualify for handouts.

"We are creating, unless we change this process, an Amtrak in the air," warned Arizona Republican Jeff Flake, referring to the national railway company that relies on state funding to survive.

Details, details

Legislators have got around White House objections by rolling airline aid into an $80bn finance package for the Iraqi war, a bill George W Bush wanted passed quickly.

They have also made some concessions to toughness, including making part or all of the aid conditional on limiting the pay of top airline executives.

While the House and Senate plans offer roughly the same amount in aid, they are structured differently - something that may cause problems as legislators seek to hammer out a unified bill.

The House plan is more focused on injecting fresh money into the industry, while the Senate plan is based more on waiving certain financial obligations, something likely to be less palatable to cash-hungry airlines.