Major airlines sought a U.S. government bailout of more than $50 billion as the White House urgently worked on drafting a financial assistance package in the wake of the steep falloff in travel caused by the coronavirus pandemic.
Conway G.
Gittens has the details.
With demand for air travel plunging as the coronavirus pandemic forces air travelers to stay home, and countries to close their borders to international flights, the U.S. airline industry is seeking a government bailout of more than $50 billion.
The trade group representing American Airlines, United, Delta, Southwest and others said in order to survive, the industry needs $25 billion in grants, $25 billion in loans and in addition - tax relief.
If it doesn't get all that, airlines could run out of money by the end of the year, warns Airlines for America.
White House economic adviser Larry Kudlow told reporters help for the airlines is being considered.
(SOUNDBITE)(ENGLISH) WHITE HOUSE ECONOMIC ADVISOR LARRY KUDLOW, SAYING: "I just don't want to be specific.
We're looking at it.
It's not--you know, it's not so much a bailout.
Airlines are a key channel in the economy.
You gotta have it.
Point number one.
Point number two, this is more in our view a liquidity help, a cash flow 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 are gonna try to help them.
We're consulting with the House and the Senate leadership to see what works and of course the Treasury Department and the Fed have enormous powers on this." U.S. airlines are not alone in seeking government help - in an unprecedented step, the world's three major airline alliances: oneworld, SkyTeam and Star Alliance called for government aid to alleviate "the unprecedented challenges faced by the industry." Airlines have already taken drastic steps to stop burning cash as sales dry up.
American Airlines is slashing 75 percent of international flights, Delta is grounding 40 percent and United is cutting half of its flights.
United provided an indication of just how steep air travel demand is dropping.
The airline said in the first two weeks of March, it saw 1 million fewer passengers and sales for March are on track to tumble $1-1/2 billion from the same time last year.
Airlines have been one of the hardest hit sectors during the coronavirus outbreak, causing a stampede from their stocks.
Shares of American Airlines are down nearly 50 percent year-to-date, Delta has lost 40 percent so far this year, while United is the worst of the three - down 60 percent since January.
Singapore Airlines has secured $13 bin in financial aid, marking the single biggest package agreed by any airline since the..
