Coronavirus: The $50 billion US airline bailout, unpacked
Airlines are getting a $50 billion chunk of the $2 trillion bailout bill passed in late March to help the U.S. economy withstand the impact of the COVID-19 pandemic. That sum includes $25 billion in loans and loan guarantees from the federal government, and another 25 billion in grants.
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It's meant to be a lifeline to keep airlines — and not just airlines, but a lot of the aviation industry — afloat during the crisis. One thing it is not: free money with no strings attached.
In this video, TPG Senior News Editor Clint Henderson explains the conditions airlines have to meet to get the money. For example, there can be no buybacks of shares until one year after loans are repaid. Airlines must also maintain a level of service between cities; the government has a preeminent interest in keeping the country connected, and the CARES Act is partly intended to do just that.
Labor is also a big part of the aid package. Airlines can use government grants to pay their salaries, since their revenue has dipped to almost zero. They must however guarantee that they will keep people employed, paid and with benefits until September 30.
Related: TPG founder and CEO Brian Kelly on travel post-coronavirus
To deal with the drop in revenue while still having to cover fixed costs like airplane leases, airlines are also parking some of their older planes — the ones that consume more fuel and emit more pollutants. That's why, as a consequence of the crisis, they will end up with smaller and greener fleets than before the coronavirus hit.
Watch our video for an easy-to-understand breakdown of this very complex piece of legislation:
Related: Everything you need to know about the deadly coronavirus
Related: A letter to our readers about coronavirus from The Points Guy founder and CEO Brian Kelly
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| 2X miles | 2 miles per dollar on every purchase |
| 5X miles | 5 miles per dollar on flights and vacation rentals booked through Capital One Business Travel |
| 10X miles | 10 miles per dollar on hotels and rental cars booked through Capital One Business Travel |
Intro Offer
Earn 200K miles when you spend $30K in the first 3 months, and an additional 200K miles when you spend $150K in the first 6 monthsLIMITED-TIME OFFER: Earn up to 400K bonus milesAnnual Fee
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Why We Chose It
The Capital One Venture X Business Card has all the Capital One Venture X Rewards Credit Card has to offer and more. It offers an incredible welcome bonus and requires an equally impressive spend to qualify. In addition, the card comes with premium travel perks like annual travel credit. (Partner offer)Pros
- The Capital One Venture X business card has a very lucrative welcome offer.
- In addition, the card comes with many premium travel perks such as an annual $300 credit for bookings through Capital One Business Travel.
- Business owners are also able to add employee cards for free.
Cons
- The card requires significant spending to earn the welcome offer.
- Another drawback is that the annual travel credit can only be used on bookings made through Capital One Business Travel.
- LIMITED-TIME OFFER: Earn up to 400K bonus miles: 200K miles when you spend $30K in the first 3 months, and an additional 200k miles when you spend $150k in the first 6 months
- Earn unlimited 2X miles on every purchase, everywhere—with no limits or category restrictions
- Earn 10X miles on hotels and rental cars and 5X miles on flights and vacation rentals booked through Capital One Business Travel
- With no preset spending limit, enjoy big purchasing power that adapts so you can spend more and earn more rewards
- Empower your teams to make business purchases while earning rewards on their transactions, with free employee and virtual cards. Plus, automatically sync your transaction data with your accounting software and pay your vendors with ease
- Redeem your miles on flights, hotels and more. Plus, transfer your miles to any of the 15+ travel loyalty programs
- Every year, you'll get 10,000 bonus miles after your account anniversary date. Plus, receive an annual $300 credit for bookings made through Capital One Business Travel
- Receive up to a $120 credit for Global Entry or TSA PreCheck®. Enjoy access to 1,300+ airport lounges worldwide, including Capital One Lounge locations and Priority Pass™ lounges, after enrollment
- Enjoy a $100 experience credit and other premium benefits with every hotel and vacation rental booked from the Premier Collection
- This is a pay-in-full card, so your balance is due in full every month