Coronavirus: US airline industry asks for $50bn in government bailout to counter drop in demand

‘The economic impact on US airlines, their employees, travellers and the shipping public is staggering’

The US airline industry has asked for $50bn in a government bailout to help deal with what it says has been a drastic fall in demand amid the coronavirus crisis.

In a letter made public on Monday, Airlines for America, the trade group representing American Airlines, United Airlines, Delta Air Lines, Southwest Airlines and others, said the industry needs $25bin in grants, $25bn in loans and significant tax relief to survive.

It said that unless the government took action, its members could run out of the money by the endow the year.

“This is a today problem, not a tomorrow problem. It requires urgent action,” said Nicholas Calio, president of the airline group.

A post on the group’s website said: “The economic impact on US airlines, their employees, travellers and the shipping public is staggering.

Read more

“This crisis hit a previously robust, healthy industry at lightning speed and we remain concerned that the impacts of this crisis will continue to worsen.”

The letter said the financial crush faced by the industry would be worse if credit card companies stared withholding payments.

Donald Trump has said he wants to support US industries such as airlines and cruise ships. Yet a public bailout of an industry may not be universally popular among his supporters.

US carriers have slashed flights and last week met with the White House to sound the alarm for urgent action.

The national economic council and US treasury are drafting a proposed assistance package and officials have been in early talks with lawmakers, officials told Reuters.

White House economic adviser Larry Kudlow told reporters on Monday the administration was “looking at” assistance to US airlines.

The companies said the grants would compensate them for reduced liquidity – net of financing – for all of 2020 attributable to the coronavirus outbreak.

United Airlines said Sunday in the first two weeks of March it had 1m fewer passengers and is currently projecting revenue in March will be $1.5bn lower than last March.

“It’s not so much a bailout [for airlines],” Mr Kudlow told Fox Business News, calling it liquidity and cash flow help.

”We don’t see any of the airlines failing. But if they get into a cash crunch, we’re going to try to help them. We’re consulting with the House and Senate to see what works.”

Additional reporting by Associated Press