Coronavirus

US Airlines Ask For Up To $50B In Financial Assistance

Airlines

As carriers face the impacts of plummeting bookings, airlines in the United States are reportedly in discussions with the government to receive up to $50 billion in aid. The help could encompass cash grants, loans backed by the government or other measures, with the inclusion of a break from fees as well as taxes, The Wall Street Journal reported.

American Airlines Group Inc. and Delta Air Lines Inc. have made public reductions in flying, optional unpaid staff leave and restrictions on hiring.

United Airlines Holdings Inc., for its part, said that it would decrease its intended flying by half next month and in May. It is also in discussions with unions regarding measures that could encompass reductions in pay, furloughs or other steps to decrease payroll costs.

In 2001, legislators provided $5 billion in payments to airlines following attacks that led to the shutdown of airspace in North America for three days. The lawmakers also set aside a maximum of $10 billion to help U.S. airlines via a loan program. Only $1.56 billion in guarantees, however, were allowed.

Larry Kudlow, the National Economic Council director, said per the report, “We don’t see the airlines failing, but if they get into a cash crunch we’re going to try to help them.”

As previously reported, American Airlines has been curtailing its flights for the next month or so due to the coronavirus. The airline said the changes were meant to adjust to decreased demand for flights in the U.S. in addition to travel restrictions put into place to try and keep the virus from spreading.

The company will cut its international capacity by three-quarters year over year from March 16 through May 6 according to a report from March 15. It will bring its Dallas-Forth Worth to London flights down to once daily in addition to one per day from Miami to London. Only three flights weekly will take place from Dallas-Fort Worth to Tokyo.

 

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