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American Airlines applies $12-billion in gov't relief

Published Apr 1, 2020 12:00 am
NEW YORK (AFP) - American Airlines became the first US carrier to announce it will request federal aid under the just-approved relief package, saying it will apply for $12 billion as it attempts to survive a global downturn sparked by the coronavirus pandemic. The US carrier has seen its business devastated as part of an industry-wide depression, but the funds should permit it to survive the very rough patch without resorting to deep layoffs, executives said in a letter to employees Monday. With air travel at a near standstill due to COVID-19, Trump administration officials have said they are examining the possibility of taking equity shares in airlines as part of the bailout for the industry. ''These funds are being distributed to ensure continuation of essential airline service and protect jobs,'' American's Chief Executive Doug Parker and President Robert Isom said in the letter. ''We intend to apply for these funds and are confident that, along with our relatively high available cash position, they will allow us to fly through even the worst of potential future scenarios.'' The executives said the funds should allow them to avoid involuntary furloughs or cuts to benefits or pay for the next six months. United Airlines and Delta Air Lines, two other large carriers have until April 3 to apply for support under the $2 trillion ''Cares'' Act, which sets aside $50 billion for passenger airlines. The airline industry is one of the sectors hardest hit by the COVID-19 outbreak, with US carriers suspending most transatlantic flights and many domestic routes. There were just 154,080 travelers on Monday, down from nearly 2.4 million a year ago, according to data from the US Transportation Security Administration. The latest forecasts by the International Air Transport Association estimate that airlines globally will loss $252 billion in revenues in 2020 compared to last year due to the cutbacks. The trade group praised the US relief bill and also cited measures by other govern¬ments, including China, Australia, Colombia and Singapore. As part of their efforts to rein in costs at a time when revenues have fallen sharply, leading US carriers have encouraged employees to take unpaid leave where they maintain their health and flying benefits. The American Airlines executives said the company would 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.''
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