US airlines are burning through cash at a rate of $US10 billion a month as planes fly less than a third full, an industry group has warned.
The estimate by Airlines For America (A4A) comes as airlines are seeking $US50 billion in government support to help battle the ravages of COVID-19.
That would include $US25 billion in grants for passenger air carriers and $US4 billion for cargo operators. The rest would be in the form of loans or loan guarantees.
A4A joined other industry groups in an urgent plea to US politicians, including Treasury Secretary Steven Mnuchin, to work as quickly as possible to financially protect the industry and the 11 million US jobs directly or indirectly supported by aviation.
Signatories to a letter sent to lawmakers Thursday include unions as well as airports, maintenance organizations and general aviation groups.
The organizations said actions taken to combat the diseases globally had been fluid and were rapidly evolving on an hour-by-hour basis.
“The rapid spread of COVID-19 and the government- and business-imposed restrictions on air travel are having never-before-seen impacts on US aviation and our employees,’’ they said.
“In the short space of two weeks, aviation industry stakeholders have seen their positions of strong financial health deteriorate remarkably rapidly, and challenges are growing for all stakeholders.
‘The downturn in demand for commercial air transportation and shipping related to COVID-19 is vast.
“For passenger carriers alone, net bookings for the next few months are down 100 – 200 percent, as cancellations are rapidly outpacing new bookings and trending worse each day.”
The letter said the US industry did not want to furlough employees and needed them to retain their positions to be ready to lead a recovery.
“What appeared to be a distant possibility just weeks ago has come to the forefront; we now face legitimate liquidity concerns and questions about our ability to meet ongoing debt obligations,’’ it added.
“This crisis hit a previously robust, healthy industry at lightning speed, and the government response needs to be just as swift, in order to save it.
“In the frankest of terms, the current economic environment is simply not sustainable.”
It also noted US airlines had taken or planned more than $US30 billion in “self-help” in response to COVID-19 in the current calendar year.
“The US aviation industry, including key industry stakeholders, is a critical component of the US economy,’ it said.
“Civil aviation drives more than 5 percent of U.S. GDP and is necessary to the success of other industry sectors – which makes it unique in its significance to the health of the overall U.S. economy.”
Aerospace manufacturers, including Boeing, are also seeking $US60 million in assistance.
“Boeing supports a minimum of $60 billion in access to public and private liquidity, including loan guarantees, for the aerospace manufacturing industry,’’ it said.
“This will be one of the most important ways for airlines, airports, suppliers and manufacturers to bridge to recovery.
“Funds would support the health of the broader aviation industry, because much of any liquidity support to Boeing will be used for payments to suppliers to maintain the health of the supply chain.
“The long-term outlook for the industry is still strong, but until global passenger traffic resumes to normal levels, these measures are needed to manage the pressure on the aviation sector and the economy as a whole.”