US airlines are seeking a $50bn bailout as the industry staggers in the wake of the Covid-19 pandemic.
Airlines for America, which represents major carriers including American Airlines, Delta and United, is calling for immediate relief in the form of direct aid and loan guarantees.
“This is a today problem, not a tomorrow problem. It requires urgent action,” said the Airlines for America president, Nicholas Calio.
The Trump administration has already signaled a willingness to come to the aid of some of the industries that have so far been hardest hit by the virus, including the airlines. If the package was granted it would be the largest industry bailout since the government interventions after the 2008 financial crisis and the airlines’ first broad bailout since September 11, 2001’s terrorist attacks.
“The rapid spread of Covid-19, along with the government and business-imposed restrictions on air travel, are having an unprecedented and debilitating impact on US airlines. Carriers have seen a dramatic decline in demand, which is getting worse by the day,” Airlines for America said in a statement.
Industry analyst the Centre for Aviation predicts that on current trajectories most airlines will be bankrupt by the end of May as cash reserves run down, fleets are grounded and what flights there are operate at much less than half full.
Over the weekend American Airlines said it would suspend 75% of its long-haul international flights starting 16 March following reduced demand and travel restrictions. Delta is cutting its flight capacity by 40%, the biggest reduction in operations in the airline’s history.
On Saturday the Treasury secretary, Steven Mnuchin, signaled the White House would be pressing Congress for aid for troubled industries. At a press conference he said there was bipartisan support for such a move. “We understand the president has made clear that, whether it’s our airline industry or cruise line industry, we expect to be coming back to Congress,” he said.
