The Trump administration wants the 12 largest US airlines to repay a portion of the federal grants they receive to cover their payrolls during the coronavirus crisis.
The large carriers, which are set to receive more than $100 million (Dh367m) in payroll assistance, are being offered aid packages that would require them to repay 30 per cent of the grants through low-interest loans due within five years, two people familiar with the offers said.
Treasury Secretary Steven Mnuchin began making calls to airlines with the terms on Friday after a flurry of lobbying to speed the process of disbursing money from the $2 trillion virus aid legislation finalised on March 27. The people asked not to be named to discuss the offers that haven’t been made public.
Airlines receiving $100m or less in payroll assistance from the government won’t need to provide a financial stake or pay compensation, the Treasury Department said Friday evening as it began sending offers to the beleaguered carriers.
“This determination will provide significant support to workers and businesses across the country, while also appropriately compensating taxpayers,” Mr Mnuchin said in a statement.
The agency said it had received 230 applications for aid from passenger carriers. It is working with 12 that would get more than $100m and is discussing what sort of financial instruments it will require in return.
Katherine Estep, a spokeswoman for Airlines for America, a trade group representing most of the large airlines, said in a statement late Friday night that “We believe the law indicated that the Direct Payroll Assistance funding was to be only in grants – which is considerably more effective for our employees – and not a combination of grants and loans.”
Democrats in Congress have complained about a requirement for a financial stake or a reimbursement, saying the payroll grants were intended to keep workers employed. A separate pool of $25 billion in loans was also included in the legislation.
The decision by the Treasury to exempt smaller carriers marks a victory for the littlest ones, but the head of the Regional Airline Association, Faye Malarkey Black, on Friday night urged the department to be flexible with some of the struggling regional carriers as well.
The decision was praised by the National Air Transportation Association, which represents some of the smaller carriers.
“The staff at Treasury has been truly exceptional in terms of their accessibility and receptiveness to our questions and concerns,” said Jonathon Freye, the group’s spokesman.
The Trump administration has quickened the pace of distributing the aid amid complaints that the process was moving too slowly as airlines -- which are flying only 5 per cent of their usual load -- bled cash.
Representatives of United Airlines and American Airlines said they had received proposed grant packages from the Treasury Department on Friday, without providing specifics.
“We can confirm we heard back from the Treasury Department regarding the application we submitted for government support, and we are currently reviewing the details of their proposal,” said Frank Benenati, a spokesman for United.
At least one other carrier also received a plan Friday, people familiar with the matter said.
“We have a great plan for the airlines -- got to keep the airlines going,” Mr Trump said Friday during a White House news briefing.
The more than $2tn federal stimulus package includes payroll grants of $25bn for passenger airlines, $4bn for cargo haulers and $3bn for airline contractors, plus another $29bn in loans for passenger and cargo carriers and $10bn in grants to airports.
The primary concern for large and small airlines has been getting access to the grants quickly to cover salaries and benefits. Under the law, airlines that get such grants must promise not to lay off workers through September 30.
Passenger carriers paid their employees more than $30bn last year during a six-month period that the government is using to help determine the amount of the aid for each airline.
The $25bn set aside for that purpose won’t cover all of the wages and benefits that airline employees earned a year ago. But most pilots and flight attendants are paid by the hour and should see a reduction in what they are paid through September even if they aren’t laid off.
Airlines are allowed to make significant cuts in their operations even though the government is requiring a minimum number of flights to cities they serve.
The six major airlines -- United, American, Southwest Airlines, Delta Air Lines, JetBlue Airways and Alaska Air -- paid employees $27bn in salary and benefits, according to US Bureau of Transportation Statistics data.
The bureau gathers data from any carrier with revenues of $20m or more, so the smallest operators aren’t included in the totals.
The wages and benefits at the major airlines is nearly 90 per cent of the total paid by all passenger carriers, indicating they are likely to get the lion’s share of government aid.
The recent steady and sustained drop in US commercial airline travel has seen passenger numbers fall 95 per cent below levels a year ago -- an outcome that hasn’t been seen since the dawn of the jet age in the early 1960s.
The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
THE DETAILS
Kaala
Dir: Pa. Ranjith
Starring: Rajinikanth, Huma Qureshi, Easwari Rao, Nana Patekar
Rating: 1.5/5
Teaching in coronavirus times
The Comeback: Elvis And The Story Of The 68 Special
Simon Goddard
Omnibus Press
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
EMERGENCY PHONE NUMBERS
Estijaba – 8001717 – number to call to request coronavirus testing
Ministry of Health and Prevention – 80011111
Dubai Health Authority – 800342 – The number to book a free video or voice consultation with a doctor or connect to a local health centre
Emirates airline – 600555555
Etihad Airways – 600555666
Ambulance – 998
Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries
Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
A cryptocurrency primer for beginners
Cryptocurrency Investing for Dummies – by Kiana Danial
There are several primers for investing in cryptocurrencies available online, including e-books written by people whose credentials fall apart on the second page of your preferred search engine.
Ms Danial is a finance coach and former currency analyst who writes for Nasdaq. Her broad-strokes primer (2019) breaks down investing in cryptocurrency into baby steps, while explaining the terms and technologies involved.
Although cryptocurrencies are a fast evolving world, this book offers a good insight into the game as well as providing some basic tips, strategies and warning signs.
Begin your cryptocurrency journey here.
Available at Magrudy’s , Dh104
More coverage from the Future Forum
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
The Orwell Prize for Political Writing
Twelve books were longlisted for The Orwell Prize for Political Writing. The non-fiction works cover various themes from education, gender bias, and the environment to surveillance and political power. Some of the books that made it to the non-fiction longlist include:
- Appeasing Hitler: Chamberlain, Churchill and the Road to War by Tim Bouverie
- Some Kids I Taught and What They Taught Me by Kate Clanchy
- Invisible Women: Exposing Data Bias in a World Designed for Men by Caroline Criado Perez
- Follow Me, Akhi: The Online World of British Muslims by Hussein Kesvani
- Guest House for Young Widows: Among the Women of ISIS by Azadeh Moaveni
