• ITVI.USA
    13,921.570
    101.060
    0.7%
  • OTRI.USA
    22.250
    -0.070
    -0.3%
  • OTVI.USA
    13,898.250
    98.860
    0.7%
  • TLT.USA
    2.650
    0.010
    0.4%
  • TSTOPVRPM.ATLPHL
    2.480
    0.060
    2.5%
  • TSTOPVRPM.CHIATL
    2.190
    0.050
    2.3%
  • TSTOPVRPM.DALLAX
    1.400
    0.180
    14.8%
  • TSTOPVRPM.LAXDAL
    2.730
    0.160
    6.2%
  • TSTOPVRPM.PHLCHI
    1.440
    0.040
    2.9%
  • TSTOPVRPM.LAXSEA
    2.870
    -0.010
    -0.3%
  • WAIT.USA
    108.000
    5.000
    4.9%
  • ITVI.USA
    13,921.570
    101.060
    0.7%
  • OTRI.USA
    22.250
    -0.070
    -0.3%
  • OTVI.USA
    13,898.250
    98.860
    0.7%
  • TLT.USA
    2.650
    0.010
    0.4%
  • TSTOPVRPM.ATLPHL
    2.480
    0.060
    2.5%
  • TSTOPVRPM.CHIATL
    2.190
    0.050
    2.3%
  • TSTOPVRPM.DALLAX
    1.400
    0.180
    14.8%
  • TSTOPVRPM.LAXDAL
    2.730
    0.160
    6.2%
  • TSTOPVRPM.PHLCHI
    1.440
    0.040
    2.9%
  • TSTOPVRPM.LAXSEA
    2.870
    -0.010
    -0.3%
  • WAIT.USA
    108.000
    5.000
    4.9%
Air CargoAmerican ShipperNews

Bailout: Airlines vs. airports

Governments shouldn’t favor airlines in economic recovery measures, airports say

Airlines and airports reeling from the coronavirus-related loss of passenger traffic and flights are seeking immediate relief from governments. And they support aid for each other with the knowledge that the aviation industry is interdependent.

But the harmony ends with airlines seeking a holiday from taxes and other charges that go to airports around the world to help pay for infrastructure, security and other functions.

In the United States, Congress could pass a major financial lifeline for airlines as part of a broader economic stimulus package as soon as today. How the money is allocated was still being ironed out late Tuesday.

Passenger and cargo airlines want $58 billion in direct cash infusions, loans and loan guarantees. In addition, they are asking for rebates from federal excise taxes paid to the aviation trust fund in the first quarter and the repeal of all taxes, including on tickets, cargo and fuel, through at least the end of 2021.

The aviation trust fund pays for construction and safety improvements at airports, as well as technological upgrades for the air traffic control system. One of the accounts that money goes to is for grants-in-aid for airports to support current and future needs.

Airports say they are already losing revenues from landing and parking charges paid by airlines, and passenger service and security charges paid by passengers. Unlike airlines that cancel flights and scale their fleets, airports’ assets are fixed.

Airports worldwide are projected to lose $4.3 billion in revenue in the first quarter, most of it in Asia, according to the Airports Council International. Airlines, by contrast, are projecting up to $252 billion in full-year revenue losses if borders are closed for up to three months.

Airport authorities, who are seeking $10 billion to prevent defaults that would raise future borrowing costs and expanded eligibility for tapping the trust fund, say a rescue plan shouldn’t benefit one industry segment at the expense of another.

“Airports rely heavily on airport charges to fund their operating and capital costs and operators find themselves under intense pressure during periods of traffic decline. Airport revenues must be sufficiently protected to ensure safe and sustainable operations,” ACI said in a statement. 

Airlines are also seeking blanket relaxation through October of rules governing takeoff and landing slots at congested airports. Airlines must use 80% of their allocated slots under normal circumstances or risk losing them the following season.

ACI says it supports suspending airport slot usage through June 30, with any extension to be determined on a case-by-case basis using hard data.

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Eric Kulisch, Air Cargo Editor

Eric is the Air Cargo Market Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals from the American Society of Business Publication Editors for government coverage and news analysis, and was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. Eric is based in Portland, Oregon. He can be reached for comments and tips at ekulisch@freightwaves.com
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