Airlines Request $50 Billion Bailout In Face Of Near-Standstill
ARI SHAPIRO, HOST:
Airlines are hoping Congress helps them weather the coronavirus epidemic. They are asking for at least $50 billion in federal aid and loans. Air travel has come almost to a screeching halt as businesses restrict travel and families cancel vacations. One trade association describes the situation as debilitating. NPR's David Schaper reports.
DAVID SCHAPER, BYLINE: It was just three weeks ago that most planes were full and demand for air travel was strong. But now...
NICK CALIO: I was on a flight a couple days ago - 14 people. That is remarkable.
SCHAPER: Nick Calio heads the industry group Airlines for America.
CALIO: Just a week ago, these companies thought they had balance sheets that were in good shape. But right now, cancellations are far exceeding bookings.
SCHAPER: And Calio says the airlines are burning through cash, adding that not even the drop in demand after 9/11, nor the slowdown caused by the Great Recession, crippled airlines as bad as this coronavirus crisis.
CALIO: This situation has deteriorated so rapidly, between the government-imposed bans, the fear about the virus, that we have seen a deterioration in the business like nothing I've ever seen in my lifetime.
SCHAPER: United Airlines has cut its flight operations in half for April and May. American has cut its international flights by 75%, while Delta has parked 300 of its planes while it waits for demand to return. The airlines are asking for a huge financial aid package that would include $25 billion in direct cash assistance, another 25 billion in loans and loan guarantees. And they want a temporary suspension of some airline ticket taxes. Calio says the airlines employ 750,000 people, and air travel helps support another 10 million jobs across the country.
CALIO: There is no recovery without the airlines. And to the degree that we have a healthy airline system like we've had the last 10 years, the better off our economy is.
SCHAPER: Henry Harteveldt is a travel industry analyst with the Atmosphere Research Group. He says there's no doubt the airlines are in desperate straits because of the outbreak.
HENRY HARTEVELDT: The coronavirus has hit the airline industry and the broader travel industry with the ugly stick.
SCHAPER: Harteveldt says with cancellations far outnumbering bookings and planes now just 20- to 30% full, it's reasonable for the airlines to ask for federal assistance. But just how much and in what form should be up for debate.
HARTEVELDT: What I hope doesn't get overlooked are the airline workers because if they are laid off or asked to take voluntary leaves of absence, there should be some way for them to receive income as well.
SCHAPER: At the White House today, President Trump told reporters the airlines will get some federal assistance.
(SOUNDBITE OF ARCHIVED RECORDING)
PRESIDENT DONALD TRUMP: We're going to back the airlines a hundred percent. It's not their fault. It's nobody's fault unless you go to the original source. But it's nobody's fault, and we're going to be in a position to help the airlines very much. We've told the airlines we're going to help them.
SCHAPER: But the president did not commit to a specific amount of aid for the airlines, nor did he say how quickly the White House and Congress could come to a bailout agreement. Meanwhile, some have called for a complete shutdown of air travel. But Nick Calio of Airlines for America warns of dire consequences, and not just for the airlines.
CALIO: It is the rumor of every single day, though, and people are fearful of it, which tells you something about how important air travel is. So things could change. But if you really want to bring this country and our economy to a grinding halt, you would halt domestic air travel.
SCHAPER: David Schaper, NPR News.
(SOUNDBITE OF KEANE SONG, "ATLANTIC") Transcript provided by NPR, Copyright NPR.