US airlines seek at least $50 billion in aid to combat coronavirus crisis
U.S. passenger airlines are seeking at least $50 billion in financial support from the government amid what many are calling an unprecedented slump in air travel from novel coronavirus pandemic.
Industry body Airlines for America (A4A) has requested the aid through a combination of grants and loans, the organization said Monday. A4A's proposal seeks $25 billion in grants to make up for a shortfall in liquidity — or cash on hand plus access to credit — and $25 billion in unsecured loans or loan guarantees.
In addition, A4A is seeking tax relief for airlines backdated to the beginning of 2020.
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"We're going to back the airlines 100%, it's not their fault, it's nobody's fault," said President Donald Trump on Monday afternoon without addressing A4A's proposal.
Alaska Airlines, American Airlines, Delta Air Lines, Hawaiian Airlines, JetBlue Airways, Southwest Airlines and United Airlines are among A4A's members.
Airlines have seen an unprecedented drop in demand amid the COVID-19 crisis. In a letter to employees on Sunday, United CEO Oscar Munoz and president Scott Kirby said revenues in March alone are on track to be $1.5 billion lower than in 2019. They added that even with plans to halve the size of the airline in April and May, the percent of seats filled could be as low as 20%.
Related: United Airlines cuts capacity by half through at least May
The $50 billion ask aims to help shore up airlines balance sheets for the duration of the COVID-19 crisis. Preserving cash, and having access to credit, is key to the operation of any company and is critical to airlines keeping their doors open for the duration.
Not everyone thinks U.S. carriers need financial support. In a report earlier on Monday, J.P. Morgan analysts Jamie Baker and Mark Streeter said they "generally prefer the U.S. not interfere with airlines," but at the same time noted some support was likely.
"Governments throughout the world will need to, and in the case of the U.S., will want to, step in," they wrote.
Related: US ‘Big 3’ well-positioned survive possible coronavirus crisis shakeout
A4A's aid request is not unprecedented though the amount is. After 9/11, the federal government gave airlines $5 billion in grants and tasked the Air Transport Stabilization Board to lend the industry up to another $10 billion. However, only about $1.6 billion was ever lent and the majority went to smaller carriers that no longer exist.
The Trump administration plans to use the post-9/11 airline relief package as a template for what they do in response to the coronavirus, The Wall Street Journal reported Monday.
Many airline leaders have said the drop in demand due to COVID-19 is worse than what they saw after 9/11.
"I’m optimistic we will receive their support," Delta CEO Ed Bastian said on the aid discussions with lawmakers in an employee memo on March 13. "That said, the form and value is unpredictable, and we can’t put our company’s future at risk waiting on aid from our government."
Related: US airlines could retire older aircraft due to coronavirus downturn
Additional reporting by Zach Wichter.
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Annual Fee
Recommended Credit
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- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
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- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
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- Annual Fee is $325.
- Terms Apply.
Rewards Rate
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
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Intro Offer
You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
Credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.Excellent to Good
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.