Formally known as the Coronavirus Aid, Relief, and Economic Security Act, the US CARES Act is a $500 million boost to the US economy. We have written a lot about the CARES Act at Simple Flying. The financial assistance package also covers many other industries in the United States. Only about 6% of the entire package is going to the airline industry.
But that still translates into a very handy $29 billion. Of that amount, $25 billion is going to passenger airlines, and $4 billion is going to cargo airlines. Not all the funds are a simple cash handout. The money is a combination of loans, loan guarantees, and grants. But the bulk of the money is in the form of grants. All up, US airlines are getting $17.5 billion in cash grants. A further $7.5 billion is available in the form of loans
There is also some relief from federal excise taxes, such as taxes on taxes on airline passenger tickets, cargo, and aviation fuel.
CARES Act funding a short term win for airlines
Naturally, the airlines were delighted with the financial windfall. American Airlines is picking up $4.1 billion in cash grants and is applying for a $1.7 billion loan. United Airlines expects to receive $3.5 billion in cash grants and a further $1.5 billion in loans. Delta Air Lines is getting $5.4 billion in cash and loans.
It’s not just the biggest carriers who picked up the cash and loans. CARES Act funding has filtered through to most airlines. Next tier down in airline size, JetBlue got $685 million in cash grants and a further $250 million in loans.