Coronavirus: ARSA calls for MRO relief package from US government

Coronavirus ARSA
As the coronavirus outbreak continues to impact the industry, the Aeronautical Repair Station Association (ARSA), which supports MRO organisations worldwide, has proposed an industry relief package to the US Government that is designed to ensure repair stations can continue to pay employees and to encourage airlines to continue to contract for maintenance during the downturn.

In a letter dated 13 March, addressed to president Trump and House and Senate leaders and distributed to all congressional offices, ARSA said it is hearing from members concerned about cashflow in light of maintenance work being cancelled and customers potentially unable to pay bills.

The maintenance industry – which includes FAA-certificated repair stations and parts manufacturers and distributors – employs more than 250,000 workers nationwide and generates approximately $50 billion in direct annual economic activity.

As lawmakers huddle to craft economy-wide and industry-specific relief legislation, ARSA is proposing a 50 per cent tax credit for airline contract maintenance work performed at US repair stations between 1 April and 31 December 2020.

The association said that historically, tax incentives such as the highly successful depreciation bonus created after 9/11 have stimulated economic activity by encouraging businesses to shift future purchasing into the present. The temporary tax credit ARSA is proposing would encourage airlines to continue to contract for maintenance during the anticipated downturn.

ARSA is also urging the administration and Congress to provide repair stations with $11 billion in relief split between grants ($8 billion) and loans or loan guarantees ($3 billion).

These amounts would help ensure repair stations are able to maintain their present workforce for the next six months, which will be essential for the necessary capacity to perform maintenance when commercial aviation activity returns to normal and preventing large industry job losses that would put additional pressure on existing government benefit programs. (e.g. unemployment insurance).

ARSA also pointed out that the maintenance industry has long been suffering from a severe and well-documented technician shortage and maintaining a highly trained workforce is critical to ensuring the long-term stability of the entire U.S. aviation sector.

“The simple fact is that we don’t know how long the coronavirus disruptions will last and what the impacts will be,” ARSA executive vice president, Christian A. Klein, said.

“Congress needs to act swiftly to limit damage to the aviation maintenance industry, which has both a huge impact on the economy and which is so essential to the safe operation of aircraft.”

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