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Airlines Ask Federal Government For Financial Assistance


The president is now urging Americans to avoid discretionary travel to slow the spread of coronavirus. And he is promising to support the air carriers now at risk from lost business.


PRESIDENT DONALD TRUMP: We're going to back the airlines 100%. It's not their fault. It's nobody's fault unless you go to the original source. But it's nobody's fault.

INSKEEP: Airlines have an ask from the federal government, $50 billion - five-zero billion. Nick Calio is going to discuss that with us. He is president and CEO of Airlines for America, which is a trade association asking Congress for that money. Welcome.

NICK CALIO: Thank you, Steve.

INSKEEP: I want to put this in a little perspective here. In 2001 after 9/11, passenger airlines received $15 billion from Congress. Why $50 billion this time?

CALIO: Fifty billion dollars because the loss is much greater than it was in 9/11. A lot of time has passed. And you can see it in our bookings and our cancellations across the country - actually, across the Atlantic and China, as well. You're looking, Steve, at an industry that, three weeks ago - even three weeks ago - right in the middle of when this started, was flying planes that had loads of capacity, the passengers filling 85 to 100% of the seats.

And that business had been going on for some time. Business was good. Over the last 10 years, the airlines in the United States built up their balance sheets, their liquidity, and even a week ago were considered to be in really good financial shape - in fact, the model of the world.


CALIO: What has happened with this pandemic has been debilitating. And the deterioration in business has been so rapid that it's thrown everything into question in terms of the businesses. We're now flying capacity - we cut down - some of the carriers have cut capacity overseas by 75%, domestically by 20, 30, 40 and 50%. We're flying planes that are half-full and less than half-full.

INSKEEP: Let me just make sure that I understand a couple of implications of this. When you say this is bigger than 9/11, I'm gathering that's because of the scale and the amount of time. After 9/11, air travel in the U.S. stopped for several days and was disrupted for a while. Now you're talking about weeks or maybe months of disruptions around the world. Is that it?

CALIO: That's correct. And with the fear that people have of the virus, even though it is safe to fly on a plane - we wouldn't be flying places if it wasn't safe - people are not getting on airplanes.

INSKEEP: But with that said, here's the other thing, though. You indicated the great financial health of the airlines up until a few weeks ago. Do you not have cash on hand? Do you not have the ability to borrow? Do your airlines not have the ability to get quite some distance before they need federal aid?

CALIO: It depends on the airline. And yes, we have the ability. But you have to look at what's called the (unintelligible) rate. It takes a lot to run an airline company. And when your revenues are less - you're taking in less than you're spending, you go through the cash very, very quickly. Right now, our cancellations are exceeding bookings by far. So that puts you in a negative position in terms of revenue.

INSKEEP: And if you were to get the $50 billion, are you going to keep people employed? Is this money going to end up with your airline employees?

CALIO: Well, our goal is to keep our employees in place. Over the last 10 years, we've invested a lot in our product as well as our people. We've hired a lot of people. And we want them to be whole, as well. We want to come out of this with operating airlines, with good employees, happy employees and passengers getting back on planes, so we can help the economy get going because airlines drive the U.S. economy to the next bar.

INSKEEP: Nick Calio, president and CEO of Airlines for America, thank you very much.

CALIO: Thank you. Transcript provided by NPR, Copyright NPR.