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American Airlines will apply for approximately $12 billion in airline rescue grants and loans, CEO Doug Parker and president Robert Isom said in a letter to employees.
“We intend to apply for these funds and are confident that, along with our relatively high available cash position, they will allow us to fly through even the worst of potential future scenarios,” the executives said.
Under the Cares Act, U.S. passenger airlines are to receive up to $25 billion in federal grants and are eligible — along with large travel agencies and aircraft maintenance businesses — for up to $25 billion in federal loans.
Grants must be used to maintain salaries and staffing levels through Sept. 30. Airlines that accept them must also continue service to markets they flew to as of March 1.
On Tuesday, the Department of Transportation clarified how it will manage that latter requirement. The rule will pertain only to U.S. destinations. In cases in which airlines serve multiple airports in the same market, they will be allowed to consolidate to a single airport. Carriers can also reduce the number of routes offered from any airport as long as at least one route is operated.
For destinations that a carrier served at least five days a week as of the last week of February, the carrier will be required to continue a minimum service level of five days per week. If carriers had been flying routes less than five days per week, they will be allowed to drop to once-weekly service.
The DOT will also allow the airlines that take federal assistance to request permission to halt service in certain markets. Airlines will have to explain why cessation is necessary.
Source: travelweekly.com
