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US Airlines Say They Could Run Out of Money By June 30, Seek A $60 Billion Government Bail Out
An airline group is calling for immediate action from the U.S. government to help with the impact the novel coronavirus is having on the aviation industry.
Airlines for America says that seven major U.S. airlines will run out of money by the end of the year or case scenario mid-year.
“This is a today problem, not a tomorrow problem,” Airlines for America (A4A) president and CEO Nicholas E. Calio said in a statement. “It requires urgent action.”
The COVID-19 outbreak and the recent travel restrictions by both states and the federal government have created an “unprecedented and debilitating impact on U.S. airlines,” A4A said, adding that demand is “getting worse by the day.”
A4A is calling on the federal government to extend $58 billion in grants and loans to tide them over, as reported in Forbes. U.S. airlines directly employ 750,000 people and support an additional 10 million more jobs, according to the group’s data.
In A4A’s “pessimistic” scenario, which it calls “most likely,” would mean all seven passenger carriers they represent –including Delta, United, and American – could run out of money between June 30 and the end of the year.
However, in an optimistic forecast in which capital markets remain open, its member airlines would see their liquidity drop 59% to $16 billion by year-end, A4A estimates.
The airlines and travel industry is among the hardest hit by COVID-19. Airlines have responded by implementing layoffs and hiring freezes in response to the travel restrictions.
Norwegian Airlines recently announced temporary layoffs of up to 50% of its employees, adding that this figure may even increase.
Delta officials said they will offer short-term, unpaid leave to employees and will implement a hiring freeze to offset losses, and United Airlines said in a memo that it has started having conversations with union leaders about reducing payroll expenses, adding that furloughs and layoffs were a very real possibility.