Poll: Do you expect most U.S. airlines will ultimately need to apply for loans from the U.S. government under the CARES Act?
The pot of $25 billion in federal workforce grants being doled out to U.S. passenger carriers would provide them enough liquidity to ride out the COVID-19 crisis until year end, a team of Moody’s analysts have concluded.
The financial aid is part of the recently passed Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, which also includes up to $25 billion in loans and loan guarantees for passenger carriers.
Additional measures included in the airline aid package, including suspension of aviation excise taxes until 2021, will provide further relief for carriers’ cash reserves. While Moody’s thinks most airlines will apply for grants, the analysts are less certain about whether they will pursue loans or loan guarantees, noting a Treasury Department requirement that carriers first exhaust all alternative credit channels to qualify for loans.
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