The U.S. Senate offered struggling airlines unprecedented aid worth $58 billion that will helping cover their staff wages, as carriers around the world seek state support and turn passenger planes into cargo liners in their desperate bid for revenues, Reuters writes.
The coronavirus crisis has ravaged the travel industry and grounded many of the world’s planes, prompting governments to take previously unthinkable steps to prevent bankruptcies, ranging from state handouts to temporarily halting competition rules.
“For airlines, it’s apocalypse now,” said Alexandre de Juniac, director general of the International Air Transport Association (IATA), which represents carriers around the world.
“Travel restrictions and evaporating demand mean that, aside from cargo, there is almost no passenger business,” he said.
IATA, which estimates the pandemic will cost the global industry $252 billion in lost revenues this year, said it had written to 18 countries in the Asia-Pacific region, including India, Japan and South Korea for emergency support for carriers.
Airlines UK, representing carriers in Britain, asked the government for tax and air traffic fee holidays.
The U.S. Senate passed an industry aid package, half in the form of grants to cover some 750,000 employees’ paychecks. Companies receiving funds cannot lay off employees before Sept. 30 or change collective bargaining agreements.
The bill has restrictions on stock buybacks, dividends and executive pay, and allows the government to take equity, warrants or other compensation as part of the rescue package.
The U.S. House of Representatives is expected to back the move on Friday. President Donald Trump has promised to sign it.
United Airlines Holdings said capacity would drop by 68% in April and Alaska Air Group said it would cut its schedule by 70% in April and May. American Airlines suspended its dividend, drew down a $400 million credit line and secured an additional loan.