Low Cost & Regional

Southwest Airlines approves of US coronavirus aid package

Southwest airlines coronavirus

Southwest Airlines has acknowledged the US Government’s Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

The airline said that it is extremely appreciative of the work of federal leaders, who have recognised the unprecedented health and economic crisis that the nation is currently facing due to covid-19, as well as the importance of airlines to the overall national economy, the supply chain, and the nation’s future recovery after this crisis subsides.

While millions of individuals and businesses are severely impacted by the coronavirus-19 pandemic, arguably no sector of the economy is as negatively impacted as the travel and tourism industries. Airlines are a critical lynchpin to the success or failure of that economic sector as there are millions of jobs associated with it.

The CARES Act is a massive piece of legislation that is a combination of:

  • Direct grants to federal, state and local public agencies and non-profits (including airports)

New authority for the Department of Treasury to award additional grants and loans to businesses (including airlines)

  • Immediate tax relief for businesses and individuals (including temporary suspension of several federal aviation taxes and fees)

It is important to keep in mind that the legislation includes many conditions, some of which are easy to analyse while others rely on the Departments of Treasury and Transportation to interpret and implement. The Department of Treasury also has broad discretion to add additional terms and conditions on any future grant or loan provided to an airline.

In the coming days, as the Departments of Treasury and Transportation begin to implement their respective pieces of the CARES Act, Southwest Airlines will be fully engaged in that process and will thoroughly analyse the pros and cons of accepting any future grants and loans that become available.

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