New York (CNN Business)The US travel industry, which has been badly hit by a plunge in sales caused by the coronavirus, could be getting some help from the federal government.
CNN has confirmed that the Trump administration is discussing ways to defer taxes on the airline, cruise and hospitality industries as a way to limit economic damage from the outbreak of the virus. Talks are still in a very preliminary stage, according to officials. The discussions regarding federal help for the industry was first reported by the Washington Post.
“We’re worried about certain sectors of the economy, airlines coming to mind, … that might need some help,” said Larry Kudlow, the director of the National Economic Council said in an interview with Bloomberg on Friday. He wouldn’t get into the details, although he said, “We’re looking for targeted measures that will do the most good in a short period of time.”
The CEOs of the nation’s major airlines met with President Donald Trump, Vice President Mike Pence, and other members of the administration including Kudlow on Wednesday.
“The airline people who came in were terrific, they didn’t ask for a bailout,” Kudlow said in a press gaggle that followed his Bloomberg interview. He said he couldn’t get into details of what kind of help might be provided, and he stressed that the administration still believes US economy is strong, despite the recent sell-off in stocks.
“We might be worried about some sectors of the economy that are really hard hit,” Kudlow said. “There are a lot of things we can do for cash flow purposes, possibly defer [taxes].”
Commercial aviation taxes and fees reached $26 Billion in 2019, or about $71 million per day, according to Airlines for America, the trade group for the domestic industry. Billions of that total are paid by airline passengers, not the airlines, although lifting the fees and taxes would reduce the price of airline tickets and could spur increased demand. A spokeswoman for the industry said she was not aware of any request for help by the industry.
On Wednesday, Trump dismissed the idea of an airline bailout when questioned about it by a reporter at the end of the meeting with the airline executives.
“Don’t ask that question please, because they haven’t asked [for] that. I don’t want you to give them any ideas,” said Trump. He said the possibility of a bailout had not been discussed.
But Alexandre de Juniac, the head of the International Air Transport Association, the global industry’s trade group, told CNN Thursday that the airline industry will be asking for relief on some of the fees and pa