By David Shepardson and Steve Holland
WASHINGTON (Reuters) - Major airlines sought a U.S. government bailout of more than $50 billion (41 billion pounds) as the White House move urgently drafting a financial assistance package in the wake of the steep falloff in U.S. travel demand.
Airlines for America, the trade group representing American Airlines, United Airlines, Delta Air Lines, Southwest Airlines (NYSE:LUV) and others, said the industry needs $25 billion in grants, $25 billion in loans and significant tax relief to survive.
It warned that without action all of their members could run out of money by year-end - and even sooner if credit card companies stared withholding payments.
“This is a today problem, not a tomorrow problem. It requires urgent action,” said Nicholas Calio, president of the airline group. The airlines' proposal would see them get funds within 15 days of approval.
U.S. carriers have slashed flights and last week met with the White House to sound the alarm for urgent action. The National Economic Council and U.S. Treasury are drafting a proposed assistance package and officials have been in early talks with lawmakers, officials told Reuters.
White House economic adviser Larry Kudlow told reporters Monday the administration is "looking at" assistance to U.S. airlines.
The companies said the grants would compensate them for reduced liquidity - net of financing - for all of 2020 attributable to the coronavirus outbreak.
United Airlines (O:UAL) said Sunday in the first two weeks of March it had 1 million fewer passengers and is currently projecting revenue in March will be $1.5 billion lower than last March.
Kudlow added that White House officials will visit the Senate to discuss options on Monday.
"It's not so much a bailout" for airlines, Kudlow told Fox Business News, calling it liquidity and cash flow help.
"We don't see any of the airlines failing. But if they get into a cash crunch, we're going to try to help them. We're consulting with the House and Senate to see what works. And of course the Treasury Department and the FED have enormous powers on this," Kudlow said.
United is cutting 50% of its flights in April and May, while American Airlines (O:AAL) said it will cut 75% of international capacity. Delta Airlines Inc (N:DAL) is cutting 40% of its flights in the next few months.
Airlines asked the administration to rebate the excise taxes carriers paid into the Air Trust Fund this year and to repeal all federal excise taxes on tickets, cargo and fuel through the end of at least 2021.