The US Senate passed an economic stimulus bill designed to support workers and industries, including the airline sector, after the global coronavirus crisis ravaged the economy in the past weeks.
The Coronavirus Aid, Relief, and Economic Security Act, which the Senate approved late on 25 March, includes provisions for passenger and cargo airlines, general aviation, as well as air transport-related employees and contractors who fear for their livelihoods after demand for air travel dropped as the pandemic spread around the world.
The bill is expected to be passed by the House of Representatives on Friday. President Donald Trump must then sign it into law.
Meantime, aircraft manufacturers are conserving cash as best they can, and hoping the crisis will pass before greater damage is done. Analysts say Boeing’s cash reserves would allow it to continue operating for about eight to 10 months, possibly longer, despite speculation about its financial condition based on recent calls for $60 billion in government aid for the US aerospace industry.
The estimate, based on Boeing having around $30 billion in cash reserves and available liquidity, reflects estimates that Boeing will burn $3-4 billion per month.
It is still unclear when Boeing will relaunch production of its beleaguered 737 Max, which was halted in January after the aircraft had been grounded for the good part of a year at that point. Depending on when and to what extent Boeing will begin to construct the aircraft again, and when it will be recertificated by the FAA, the company would spend more or less. Last week Boeing temporarily shut its Seattle-area production sites.
Brazilian aircraft manufacturer Embraer said on 26 March that the coronavirus has caused some airline customers to defer orders into next year, but it has not yet had any cancellations. Executives also told anaysts that it is still expecting its planned tie-up with Boeing to go ahead, pending European Union approval of the merger, which is expected sometime after June. Embraer also said this week that that it was assisting in the effort to support medical needs in its home country and has begun to work together with a Sao Paolo-area hospital to make ventilator parts.
While the commercial sector struggles and awaits the promised government aid, aeroospace defence contractors are still expected to continue to produce material. To keep factories humming the Pentagon issued a memo on 20 March that declared the Defense Industrial Base a “Critical Infrastructure Sector”, making the industry exempt from any quarantine enforcement.
Companies are implementing measures like enhanced cleaning protocols, social distancing where in-person work is required, remote video conferencing, work from home arrangements and staggered work schedules, that will hopefully slow the spread of the virus.
Here are the details:
Thursday, 26 March recap:
- US government aid to aerospace could mean oversupply in future, but avert ‘catastrophe’ now: analyst