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Airlines for America: Industry needs bailouts urgently

written by Adam Thorn | March 17, 2020

Airlines for America, a trade body that represents Delta, United and American, has called on the US government to provide an immediate bailout.

The organisation said, “This is a today problem, not a tomorrow problem. It requires urgent action.”

The plea comes as industry analysts the Centre of Aviation (CAPA) warned “most” airlines would be bankrupt by the end of May.

American Airlines baggage handlers (American Airlines)

In a statement released on Monday, Airlines for America said the coronavirus crisis “appears to have no end in sight” and urged the government to provide grants, loans and tax relief. It called its impact “staggering”.

“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 US airlines,” the group said. “Carriers have seen a dramatic decline in demand, which is getting worse by the day.

“The economic impact on US airlines, their employees, travellers 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.

“US 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.

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“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 US airline industry and protect their employees: 1) grants; 2) loans; and 3) tax relief.”

Meanwhile, CAPA released a similarly dramatic statement calling for worldwide collaboration to avoid worsening the crisis.

CAPA said, “Co-ordinated government and industry action is needed – now – if catastrophe is to be avoided.

“As the impact of the coronavirus and multiple government travel reactions sweep through our world, many airlines have probably already been driven into technical bankruptcy, or are at least substantially in breach of debt covenants.

“While governments are grappling with the health challenges of coronavirus, it is clear that there is little instinct to act co-operatively. Messages are mixed and frequently quite different.”

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