American Airlines to apply for $12b in govt relief
American Airlines said it will apply for the $12 billion in assistance it has been offered by the US government as it attempts to steer through the global aviation downturn sparked by the coronavirus pandemic.
The airline industry is one of the sectors hardest hit by the COVID-19 outbreak, with US airlines suspending most transatlantic flights and many domestic routes.
The US Congress has designated $50 billion in spending for the industry in its $2 trillion coronavirus economic rescue package.
American Airlines chief executive Doug Parker and President Robert Isom said in a Monday memo to staff that the company would apply for the $12 billion in assistance it had been offered, a sum that represents nearly a quarter of the industry’s relief funds.
“We intend to apply for these funds and are confident that ... they will allow us to fly through even the worst of potential future scenarios,” the pair wrote.
They added that the company would also institute “enhanced voluntary leave and early retirement options” as “there is no doubt we will have more team members than we need to fly our dramatically reduced flight schedules over the next several months.”
Acceptance of the funds would, however, ensure payroll assistance resulting in “no involuntary furloughs or cuts in pay rates or benefits for the next six months,” they said.
Trump administration officials have said they are examining the possibility of taking equity shares in airlines as part of the bailout plan for the industry.
“I think in return for direct cash grants, which is what the airlines have asked for, I see no reason why the American taxpayer shouldn’t get a piece,” White House economics adviser Larry Kudlow told Fox News on Sunday.
Aid payment details will be discussed only once American Airlines has officially made its request.