United States President Donald Trump has said his government will “back the airlines 100%”, hours after the country’s carriers appealed for USD58 billion in aid as the coronavirus wreaks havoc on travel demand.
Trump cautioned Americans to avoid discretionary travel, yet he also told reporters in the White House briefing room on March 16: “As far as the airlines are concerned, we are going to back the airlines 100%. We’re going to help them very much.”
Via the trade group Airlines for America, the nation’s biggest carriers had released a statement earlier in the day outlining urgent needs and depicting a dire financial situation.
“This is an extremely fluid situation that is evolving rapidly,” the group said. The spread of Covid-19, along with 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. Carriers have been forced to remove flights from their schedule and make historic capacity cuts. Cancelations are spiking, and for US carriers those cancelations are outpacing new bookings. The economic impact on US airlines, their employees, travellers, and the shipping public is staggering,” the statement said.
“The current economic environment is simply not sustainable, and it is compounded by the fact that the crisis does not appear to have an end in sight,” the group underlined.
It is asking for USD50 billion for passenger airlines and USD8 billion for cargo carriers. It is also seeking a rebate of excise taxes paid by passengers to the federal government from January 1 to March 31 and a temporary repeal of the tax.
Trump’s economic adviser, Larry Kudlow, told reporters outside the White House on March 16 that Speaker of the House of Representatives Nancy Pelosi and Treasury Secretary Steven Mnuchin had been holding talks on airline assistance.
“It’s not so much a bailout,” he said. “Airlines are a key channel in the economy. This is more, in our view, a liquidity help, cashflow help, because again we see this virus problem as a matter of months, not years. And we don’t see the airlines failing. But if they get into a cash crunch, we’re going to try to help them.”
