Left Menu
Development News Edition

Delta, other airlines apply for U.S. payroll grants for crisis help

Reuters | Washington DC | Updated: 04-04-2020 02:24 IST | Created: 04-04-2020 02:16 IST
Delta, other airlines apply for U.S. payroll grants for crisis help
Representative Image Image Credit: ANI

Delta Air Lines and JetBlue Airways Corp JBLU.O> said on Friday they had applied for U.S. payroll grants meant to keep workers employed while airlines ride out their toughest crisis in history due to the coronavirus, but warned the funds are "not enough." The U.S. Treasury had asked passenger and cargo carriers to apply by 5 p.m. EDT (2100 GMT) on Friday to expedite up to $32 billion in payroll grants for the air industry within a $2.3 trillion coronavirus relief package approved last week. Airport contractors are also eligible for grants.

In a memo to employees, Delta Chief Executive Officer Ed Bastian said the company had applied for its share of worker-protection grants, but "those funds alone are not nearly enough." Delta expects a 90% decline in second-quarter revenue.

JetBlue also told employees it "may not get enough to cover pay and benefits at the level you see when we are flying at full capacity." Companies were allowed to request the amount they paid in salaries and benefits in the second and third quarters of 2019 and must agree to keep their workforce until Sept. 30, even as they drastically reduce flight schedules to match a dramatic drop in demand.

American Airlines, with the largest number of full-time employees among U.S. airlines at 133,700 in 2019, also submitted an application on Friday, a spokeswoman said, without disclosing the details. American has said it would seek up to $6 billion in grants and $6 billion in government loans under a separate $32 billion funding option for the sector.

American stock hit a record low on Friday. Treasury had asked companies to propose financial instruments such as warrants or equity options as possible taxpayer compensation, a condition many Democrats and airline labor unions had argued could dissuade airlines from taking money meant to protect workers.

United Airlines Holdings Inc and Southwest Airlines Co were also expected to apply, though they have also warned they may still shrink before year-end. Among cargo carriers, FedEx Corp said it could benefit from certain government relief options after outlining other steps it is taking to save cash and boost liquidity, including slashing its chief executive officer's pay and drawing down $1.5 billion from a credit facility.

Cargo carriers are suffering from disruption to global supply chains and high-margin business-to-business demand, even as ground-package delivery services increase. Airlines have also raised debt and taken a series of cost-cutting measures as they ground an unprecedented number of planes and implement new policies on ticket refunds and exchanges in an effort to encourage passengers to book flights.

Passenger airlines are eligible for $25 billion in cash grants, cargo carriers $4 billion and airport contractors like caterers and airplane cleaners $3 billion, and an equal amount in loans. Other airlines across the world are also seeking government aid as they brace for a prolonged downturn, with Air France-KLM in talks with banks to receive up to 6 billion euros ($6.5 billion) in loans guaranteed by the French and Dutch governments, sources told Reuters.

Planemakers are also preparing for a slump in demand, with Reuters reporting on Friday that Airbus SE is studying a sharp cut in output of its top-selling A320 jet series.


TRENDING

OPINION / BLOG / INTERVIEW

In rebuking FBR, Pakistan’s courts take a stand for public health

The system, if implemented effectively, will allow Pakistans revenue service to combat the illicit trade in tobacco products and potentially add hundreds of millions of dollars to the states budget each year. ...

Dissecting how COVID-19 is catalyzing the trajectory of New World Order

The ensuing pandemic of COVID-19 has hit the globalization in two ways firstly, shrinking the importance of globalization as an economic force by curtailing mobility through worldwide lockdowns, and secondly, rejuvenating the idea of indig...

Domestic seafood trade in focus as COVID-19 changes market dynamics

As predicted earlier in a report titled Seafood industry post-COVID 19 An overhaul to trigger the growth of small fisheries, one of the changes going ahead would be increased focus on domestic seafood trade, driven by falling exports and su...

Migration post-COVID 19: Taking cues from the past to rebuild economies

Migrants are an irreplaceable part of even the essential workforce of developed countries and are on the frontline in the fight against the crisis, making an immeasurable contribution to saving the lives of natives with voting rights....

Videos

Latest News

Woman's bag snatched by bike-borne man in southeast Delhi, case registered

Delhi Police has registered a case against a bike-borne man who snatched a womans bag in southeast Delhi, officials said on TuesdayThe incident came to light after Ajit Tyagi, a member of the Aam Aadmi Partys social media team, tweeted abou...

COVID-19: Singapore heads towards worst-ever recession in nearly two decades

Singapore is heading towards its worst-ever recession in nearly two decades as the country faces severe economic downturn due to the COVID-19 pandemic, which has infected 32,343 people, officials said on Tuesday. The gross domestic product ...

Airtel Payments Bank, Mastercard team up to develop customised financial products for farmers, SMEs

Airtel Payments Bank has teamed up with Mastercard to develop customised financial products for Indian farmers and Small and Medium Enterprises SMEs in a bid to deepen penetration of financial services in underbanked and unbanked regions, a...

Oppn MLAs demand separate SOP for Goa to deal with COVID-19

Opposition MLAs of Goa met the state chief secretary on Tuesday to demand a seperate Standard Operating Procedure SOP for the coastal state, which will do away with paid quarantine for Goans working on ships amid the COVID-19 pandemic. The ...

Give Feedback