Aviation Industry Stabilization Act of 2003

Aviation Industry Stabilization Act of 2003 - Amends Federal transportation law to change from discretionary to mandatory the authority of the Secretary of Transportation to provide insurance and reinsurance against loss or damage arising out of any risk from the operation of an American aircraft or foreign-flag aircraft.

Grants the Secretary authority to extend through calendar year 2007 the termination date of any insurance policy issued to an air carrier.

Makes permanent the Secretary's authority to declare an air carrier a victim of terrorism not liable for third party claims arising out of acts of terrorism.

Extends the period for an air carrier to apply for a loan guarantee or line of credit to pay for its aviation fuel costs or increases in aviation fuel costs under the Air Transportation Safety and System Stabilization Act.

Requires the Under Secretary for Border and Transportation Security, after all cockpit doors are strengthened, to consider and report to Congress on whether it is necessary to require Federal air marshals to be seated in the first class cabin of an aircraft with strengthened cockpit doors.

Requires the Under Secretary to: (1) undertake action necessary to improve the screening of mail so that it can be carried on passenger flights; and (2) reimburse air carriers for certain screening and related activities as well as the cost of fortifying cockpit doors, and for any financial losses attributed to the loss of air traffic resulting from the use of force against Iraq in calendar year 2003.

Requires that an airlift services contract entered into by the Secretary of Defense and an air carrier provide for the air carrier to be compensated for the positioning, repositioning, and other ferry portions of missions performed under the contract.

Requires the Secretary of Energy, if the use of force against Iraq is authorized in calendar year 2003, to drawdown and distribute petroleum from the Strategic Petroleum Reserve to the extent necessary to remedy a dislocation in the jet fuel market or an extraordinary increase in the price of jet fuel.

Establishes an air cargo security working group composed of various groups to develop recommendations on the enhancement of the current known shipper program.

Directs the Comptroller General to analyze factors contributing to the financial difficulties of air carriers to determine possible approaches to alleviate such difficulties.