The US Senate has drafted a bill that would provide $58 billion in aid to help US airlines manage through the coronavirus pandemic, which has forced many to reduce schedules, ground aircraft and furlough staff.

The Coronavirus Aid, Relief, and Economic Security Act of 2020, released by the US Senate on 19 March, offers $208 billion in collateralised loans and loan guarantees to US businesses, with $50 billion reserved for passenger air carriers and $8 billion for cargo carriers. In addition it suspends excise taxes on transportation and kerosene for commercial aviation until the end of the year.

As written, the bill would not provide assistance in the form of direct grants or unsecured loans, as the airline industry has requested.

Before becoming law, the bill would need approval by the House of Representatives, and President Donald Trump’s signature.

United Airlines A350

Source: United Airlines

US government offers airlines assistance

“American businesses didn’t cause this crisis, and aggressive action is warranted to ensure they have the liquidity necessary to weather its direct impacts,” says Richard Shelby, chairman of the US Senate Committee on Commerce, Science and Transportation.

“We are not bailing out the airlines or other industries – period. Instead, we are allowing the Treasury Secretary to make or guarantee collateralised loans to industries whose operations the coronavirus outbreak has jeopardised. In my judgment, this approach strikes an appropriate balance between providing assistance and protecting taxpayers,” Shelby says.

Industry trade group Airlines for America (A4A) says it commends the Senate’s bill but that loans will not be enough to alleviate the financial distress. 

”Loans alone are not sufficient and should be coupled with a worker payroll assistance program and targeted tax relief which will allow airlines to keep operating through this crisis and protect the 750,000 jobs of hard-working individuals who are directly employed by the industry,” A4A says in a statement on 19 March.

In recent days, airlines have faced some public criticism for allegedly failing to save sufficient cash during recent boom years.

Earlier this week, A4A put forward an aid request for government grants totaling $29 billion, including $25 billion to passenger airlines and $4 billion to cargo carriers. A4A also requested unsecured, zero-interest loans worth another $29 billion.

The grants, requested of the US Department of the Treasury, would “compensate for reduced liquidity… attributable to the novel coronavirus”, said the group.

The Senate agrees the industry needs help, but attached strings to the package. 

“Nothing in this act shall be construed to allow the President or [Treasury] Secretary to provide relief to eligible entities except in the form of sufficiently collateralised loans and loan guarantees,” the Senate bill notes.


Updated on 19 March with comment from Airlines for America (A4A).