Airlines for America Advocates for Financial Assistance
Airlines for America (A4A), an industry trade organization that advocates on behalf of leading U.S. airlines, both passenger and cargo carriers, has issued a statement on COVID-19 and asked for more than $50 billion in assistance. A4A works collaboratively with industry stakeholders, federal agencies, the Administration, Congress, labor and other groups to improve aviation for the traveling and shipping public.
The statement from A4A reads:
“This is an extremely fluid situation that is evolving rapidly. 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 U.S. airlines. Carriers have seen a dramatic decline in demand, which is getting worse by the day. Carriers have been forced to remove flights from their schedule and make historic capacity cuts. Cancelations are spiking, and for U.S. carriers those cancelations are outpacing new bookings. The economic impact on U.S. airlines, their employees, travelers and the shipping public is staggering. 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.
“U.S. carriers are in need of immediate assistance as the current economic environment is simply not sustainable. This is compounded by the fact that the crisis does not appear to have an end in sight. In order to combat this unprecedented economic downfall, A4A is recommending the following combination of programs to provide immediate and medium to long-term assistance to the U.S. airline industry and protect their employees: 1) grants; 2) loans; and 3) tax relief.
“U.S. airlines are in continuous conversations with the Administration, Congress and labor unions in an effort to secure financial assistance from the federal government to protect and preserve the 750,000 jobs of hardworking men and women who are directly employed by U.S. airlines, as well the 10 million jobs supported by the airline industry. This includes pilots, flight attendants, mechanics, gate agents, ticket agents, parking attendants and many more. Our employees are truly the backbone of the U.S. airline industry and our greatest resource, and U.S. carriers are doing everything in their power to protect their livelihood.”
A4A has asked for grants to U.S. Part 121 passenger air carriers in the aggregate amount of $25 billion to compensate for reduced liquidity (net of financing) – from December 31, 2019, through December 31, 2020. Grants have also been asked for U.S. Part 121 cargo air carriers in the aggregate amount of $4B to compensate for reduced liquidity (net of financing) for the same time frame.
In regards to loans, A4A has asked for a voluntary liquidity facility program in an aggregate amount up to $25 billion pursuant to which the Federal Reserve would purchase financial instruments from or provide zero interest unsecured loans or zero interest unsecured loan guarantees to U.S. Part 121 passenger air carriers, as well as an aggregate amount of up to $4 billion to U.S. Part 121 cargo air carriers.
In addition, the company has asked for a rebate to U.S. Part 121 air carriers in the amount of federal excise taxes paid into the Airport and Airway Trust Fund (AATF) that have been remitted to the U.S. Government beginning January 1, 2020 through March 31, 2020. A4A has also asked for a temporary aviation excise tax repeal of all the federal excise taxes on Part 121 air carriers, including those taxes on tickets, cargo and fuel through December 31, 2021, subject to a trigger for a further extension beyond 2021 dependent upon economic circumstances.
“This is a today problem, not a tomorrow problem. It requires urgent action,” said A4A President and CEO Nicholas E. Calio.