Southwest Airlines Boeing 737 Max aircrafts grounded, Mike Blake, Reuters

U.S. airlines will receive almost $60 billion bailout from coronavirus stimulus bill

The airline industry is facing its biggest crisis since the September 11, 2001 attacks. On 16th of March, 2020 global airline alliances (oneworld, SkyTeam and Star Alliance) jointly called on governments for support during COVID-19 pandemic.

U.S. airlines will receive bailout

And on 27th of March, 2020 President Donald Trump signed $2 trillion coronavirus stimulus bill and U.S. airlines will get almost $60 billion from that stimulus package. Bill prohibits layoffs, stock buybacks, and dividends.

Here how it will be divided:

  • $25 billion in loans and loan guarantees for passenger airlines
  • $25 billion in grants to pay workers through September for passenger airlines
  • $4 billion in loans and loan guarantees for cargo air carriers
  • $4 billion in grants to pay workers through September cargo air carriers

In total U.S. passenger airlines and cargo air carries will get $58 billion in loans and loan guarantees. Read more here.

Separately coronavirus stimulus package includes a $17 billion federal loan provision for businesses considered “critical to maintaining national security.” Boeing is expecting to receive the biggest chunk of these $17 billions as it seams it was prepared specifically for Boeing (read here). U.S. can’t loose major aircraft maker.

Will it be enough to save airlines? The biggest should survive and government probably will put more money if they will see it is not enough.

What about Europe?

It is different story in Europe. Neither EU, nor UK are in rush to give cash to airlines. Why? Because airlines have plenty of cash at the moment.

EasyJet has a £1.6 billion ($2 billions) cash balance and mortgage-free aircraft worth £4 billions ($5 billions). Ryanair has cash and cash equivalents worth €4 billions ($4.4 billions). IAG (owner of British Airlines) has €7 billions ($7.7 billions) in cash plus €1.9 billions ($2.1 billions) of finance facilities.

Lufthansa is talking with the German government about providing special loans, but no news so far.

The rest of World

India is preparing a rescue package to support its carriers. The Finance Ministry is considering a proposal worth up to $1.6 billion.

Virgin Australia asked Federal Government for $1.4 billion coronavirus bailout. The major competitor – Qantas – says if that happens, it wants $4.2 billion, because Qantas revenue was three times higher than Virgin’s .

What is happening now

Meanwhile most of airlines are parking their aircrafts in any empty space they can find.

Here are some pictures of grounded planes around the world: