The U.S. airline industry has been hit hard by the coronavirus outbreak and will ask the federal government for a $50 billion aid package, according to Airlines for America (AFA), an airline advocacy organization.
“U.S. carriers are in need of immediate assistance as the current economic environment is simply not sustainable,” an AFA statement said. “This is compounded by the fact that the crisis does not appear to have an end in sight.”
CNN reported on the move that reverses an earlier stance the air travel industry could weather the storm — before the full impact of the virus outbreak came to light:
The requested aid would be in the form of loans, grants and tax relief. The airlines are looking for up to $25 billion in grants for passenger air carriers and $4 billion in grants to cargo carriers, and the same amounts in loans or loan guarantees, Airlines for America outlined in a briefing document.
The U.S. aid package has been discussed with key lawmakers and staff, as on Capitol Hill and the Trump administration, two sources said. The discussions were described as early-stage. But one source noted there is a growing recognition from the federal government that conditions “are getting very bad, very fast.”
In addition the request to help the airlines, a trade group for the nation’s airports is requesting a separate $10 billion bailout, an airport industry source told CNN.
The request also is in line with expected revenue drops at airports because most of the fees airlines pay are based on flight volume.
Aircraft manufacturer Boeing is quoted in the CNN report that it is in discussions with the feds and the airline industry.
“We’re leveraging all our resources to sustain our operations,” Gordon Johndroe, a Boeing spokesman, said. “Meanwhile, ready short term access to public and private liquidity will be one of the most important ways for airlines, airports, suppliers and manufacturers to bridge to recovery, and we appreciate how the Administration and Congress are engaging with all elements of the aviation industry during this difficult time.”
America’s major airlines would run out of money as soon as June 30 without financial assistance, AFA reported.
President Donald Trump said at a coronavirus press conference on Monday at the White House his administration is behind helping the industry.
“We’re going to back the airlines 100 percent,” Trump said. “We’re going to be in a position to help the airlines very much.”
“We’ve told the airlines we’re going to help them,” Trump said. “It’s very important.”
“There are about 460,000 jobs in the US airline industry, according to the Labor Department, and most of them provide good pay and strong benefits,” CNN reported.
“The industry is crucial for the efficient functioning of the U.S. economy, not only enabling business travel but also leisure travel, which itself is a major sector of the U.S. economy.
Commercial aviation taxes and fees totaled $26 billion in 2019, or an estimated $71 million per day, AFA reported.
CNN reported that the last bailout for U.S. airlines was $15 billion bailout – $5 billion in cash and $10 billion in loan guarantees — following the 9/11 terror attack.
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