A lifeline emerges for the devastated airline industry
American Airlines planes parked at Los Angeles International Airport. Photo: Alex Tai/SOPA Images/LightRocket via Getty Images
Congress' massive $2 trillion coronavirus stimulus package includes $58 billion for U.S. airlines, half in grants to cover 750,000 employees' paychecks, and the rest in loans or loan guarantees to help them keep operating during the worst travel downturn in history.
Why it matters: With some 80 million U.S. residents under mandatory stay-at-home orders and the coronavirus pandemic continuing to spread, hardly anyone is flying these days. But when the public health crisis ends, airlines want to be able to take off again quickly.
- The number of travelers passing through airport security checkpoints dropped by more than 80% between March 13, when the emergency was declared, and March 23, according to the Transportation Security Agency (TSA).
The big picture: The Treasury Department can demand stock warrants in exchange for the loans, which means U.S. taxpayers could wind up owning a chunk of America's best-known airlines.
- Air cargo carriers get a chunk of the money, too — $4 billion in grants and $4 billion in loans.
- Airports get $10 billion in grants and contractors like catering, ground crew and ticketing get $3 billion.
One of the most controversial recipients is Boeing, which, although not named, is believed to get up to $17 billion for loans and loan guarantees for "businesses critical to maintaining national security."
- Boeing CEO Dave Calhoun told Fox Business that his company would refuse government assistance if it came with equity strings attached.
- The company could tap other funds in the package and be subject to the same limits on stock buybacks and executive pay as other large employers, without giving up a stake in the company.
In total, the stimulus package includes $114 billion for transportation.