MIAMI – Eight carriers are requesting immediate government grants and loans of up to US$58bn due to the urgent situation as stated in a letter to the US Treasury sent on Saturday.
The Chief Executives of American Airlines (AA), Delta Air Lines (DL), United Airlines (UA), Alaska Airlines (AS), JetBlue (B6), Southwest Airlines (WN), Hawaiian Airlines (HA) and Atlas Air, a cargo carrier, signed the memo.
The letter was also signed by senior executives at UPS Corp (UP) and FedEx (FX) and the head of an airline trade association.
The US Treasury has an April 1 deadline to allocate options to airlines that apply for grants as carriers have threatened to start laying off tens of thousands of workers in lieu of the urgent bailout, according to Reuters.
Airlines request that the US Treasury Department and the Department of Transportation designate aid in accordance with the salaries and benefits that were paid from April 1 through Sept. 30, 2019.
In addition to $25bn in loans, the $2.2tn stimulus and assistance legislation signed into law by POTUS on Friday gives passenger airlines $25bn in cash support to cover payroll costs. Cargo carriers on their part are eligible for $4bn in grants and $4 billion in loans.
The action follows a previous letter signed by airlines’ Chief Executives in which they requested US$50bn government’s aid. The letter was also supported by Airlines for America (A4A) in a bailout package proposal with grants, loans, and tax relief to help the US aviation industry.
In summary, airlines propose that loans should be divided by each carrier’s passenger pro-rata share of “system available seat miles” for commercial airlines while loans for cargo carriers should be divided by “revenue ton-miles.”
Companies’ executives are looking for a meeting with the Treasury Department to discuss the terms to propose a formula for allocations, but by now they have not had an answer.