Coronavirus Relief Act Designates Billions For Aviation


The Coronavirus Aid, Relief and Economic Security Act (CARES) Act, which was passed by the U.S. House of Representatives on Friday, has designated up to $25 billion in financial assistance for passenger air carriers, up to $4 billion for cargo carriers and up to $3 billion for aviation contractors. To be eligible for assistance, air carriers and contractors cannot conduct involuntary furloughs or reduce employee pay rates and benefits until Sep. 30, 2020, or “pay dividends, or make other capital distributions, with respect to the common stock” of the company through Sep. 30, 2021. The bill (PDF) stipulates that the funds may only be used for employee wages, salaries and benefits.

Accepting funds also puts compensation limits on company employees who made more than $425,000 in 2019. Those limits extend for two years and include prohibiting those employees from making more than they did in 2019 for any 12 calendar months or receiving severance pay or other termination benefits in excess of twice the maximum total compensation received in 2019. To guarantee any loans given by the government, “the Secretary [of the Treasury] may receive warrants, options, preferred stock, debt securities, notes, or other financial instruments issued by recipients of financial assistance … which, in the sole determination of the Secretary, provide appropriate compensation to the Federal Government for the provision of the financial assistance.”

The CARES Act was passed by the Senate on Wednesday. It will go into effect once signed by the president.

Kate O'Connor
Kate O’Connor works as AVweb's Editor-in-Chief. She is a private pilot, certificated aircraft dispatcher, and graduate of Embry-Riddle Aeronautical University.

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  1. The numbers are too staggering for my finite mind to process. Every time I pass through the big hubs my heart goes out to the people who clean restrooms. As long as these staggering amounts of money are being dropped on the industry anyway, one would hope some of this reaches them too. As someone who who experienced a layoff, I’m glad to see that the eligibility for assistance requirements are at least favorable towards employees and come with stipulations for the higher paid. Undoubtedly the several day delay had something to do with these caveats, which again, as long as these staggering amounts are going to be dropped onto the industry anyway, is a good thing. More money than I can comprehend, not perfect, but better than it could have been.

    Unfortunately there are no stipulations, at least none cited in this article about requiring passenger airlines to go through some basic potty training on quality customer travel experience and implement what they will learn. Things like seat pitch, late departures and arrivals, cancellations, numerous gate changes, too many irritating, long, loud cabin announcements, many of them airline adverts, etc. Hopefully that is part of the package and we’ll find out about it later. Not holding my breath.

  2. Several aviation companies(Boeing and Southwest) have already stated they don’t like the conditions for any bailout and will forgo any financial aid rather than submit to those conditions. The biggie is the government getting ownership stake of a company that accepts aid. Not that I am shedding any tears over that. Hopefully that leaves more for those employees who really need it.

    At least someone at the FAA has finally come to their senses about some deadline relief for pilots. My company has already been told there is some relief coming and that my recurrent training and due month will probably be delayed a couple of months. Still waiting for final details.