Airlines are no. 1 priority for virus relief, Trump says

The airline industry “would be the number one” priority for federal assistance in the wake of drops in travel because Covid-19, President Donald Trump said Wednesday.

“They go from having the best year they’ve ever had to having no passengers because of what we had to do to win this war,” Trump said at a briefing on the administration’s response to the virus.

The Treasury Department will propose lending airlines $50 billion in a coronavirus stimulus plan, according to a document obtained by Bloomberg News. Such a proposal would fall short of the aid being sought by the industry, which requested $29 billion in grants and another $29 billion in loans.

Senate Commerce Committee Chairman Roger Wicker, a Mississippi Republican, said he is supportive of the Treasury plan, but declined to specify how much it would be. Wicker has been asked by Majority Leader Mitch McConnell to help draft an airline aid package for inclusion in the next stimulus package.

“We are very much trying to accommodate the Trump administration and Secretary Mnuchin,” Wicker said, referring to Treasury Secretary Steven Mnuchin.

Senator Richard Shelby, an Alabama Republican, said lawmakers were still working on the airline provision. It will consist of “collateralized loans, no bailouts,” and some grants that will be paid back, Shelby said.

Likening the situation to the aftermath of the terrorist attacks of Sept. 11, 2001, he said he hoped the Senate could vote on the package, which is known as phase three of the response to the crisis, before the end of next week.

The president of the trade group representing large airlines praised Trump’s support for the industry, but didn’t comment on any details about the White House proposal.

“We very much appreciate the ongoing constructive conversations we are having with the White House and Congress,” Nicholas Calio, head of Airlines for America, said in a press release. “The economic impact on U.S. airlines, their employees, travelers and the shipping public is staggering.”

Trump spoke by telephone earlier Wednesday with Calio as well as the chief executive officers of several airlines, including Ed Bastian of Delta Air Lines Inc., Gary Kelly of Southwest Airlines Co., Oscar Munoz of United Airlines Holdings Inc., and Doug Parker of American Airlines Group Inc.

Other travel industry groups, which have seen plunging revenues as people adhere to warnings about spreading the virus, are also seeking billions of dollars of government help.

Bond Payments Due

The Airports Council International - North America and the American Association of Airport Executives on Wednesday wrote to congressional leaders saying they need an immediate $10 billion cash infusion to help make bond payments.

The federal government already provides direct grants to airports through the Airport Improvement Program and it could be adapted quickly to provide assistance, the groups said. Airports owe a total of almost $100 billion and must make $7 billion in bond principal and interest payments this year, the letter said.

“No U.S. commercial service airport has ever defaulted on a bond payment,” they said in the letter. “Allowing a default now would be devastating for any affected airport and the entire industry, as future borrowing costs would increase significantly.”

Hotel, convention and other travel-industry companies are separately asking for $250 billion in direct aid as they predict millions of layoffs.