US Airlines Seek $50 Billion in Government Assistance
U.S. airlines are seeking government assistance of more than $50 billion, including a mix of direct aid and loan guarantees. Airlines are suffering amidst the drop in travel demand during the coronavirus outbreak.
The aid, if received, would be the industry’s first bailout since September 11, 2001. It is another sign of the huge financial damage the pandemic is causing in the United States and around the world.
Airlines for America, which represents carriers including Delta, United, American and Southwest, recommended passenger carriers immediately receive up to $25 billion in grants and in the medium term, loans of $25 billion with low or no interest at all.
Travel demand in some markets has completely collapsed. Airlines have cut their schedules, instituted hiring freezes, and have warned that the situation is like nothing they have ever seen before.
What is interesting about the request, is that U.S. airlines spent 96% of their free cash flow, close to $45 billion, to purchase shares of their own stock from 2010 to 2019, according to data compiled by Bloomberg. The world’s largest carrier, American Airlines, was the biggest buyer, spending $12.5 billion.
Hotels could be next in line for a handout as they are meeting with the White House today to discuss their options as the Trump Administration is seeking a $850 billion stimulus package.
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The bailouts won’t do a thing. We have to self quarantine as an entire population for at least 18 months for this virus to pass according to experts. Trump is about to look stupid as hell cause this stimulus will do nothing. It’s pretty basic economics. If everything is closed how is giving travel industry related companies going to help a long with people having to stay in for months on months possibly.
Read the study summary. 3 min read.
https://www.imperial.ac.uk/media/imperial-college/medicine/sph/ide/gida-fellowships/Imperial-College-COVID19-NPI-modelling-16-03-2020.pdf
What this guys says! Service must improve if the public bails airlines out!
https://www.nytimes.com/2020/03/16/opinion/airlines-bailout.html?te=1&nl=dealbook&emc=edit_dk_20200317&campaign_id=4&instance_id=16835&segment_id=22304&user_id=ead062977bcb05ce6e8c118c9b0909fd®i_id=3462814620200317