While a lot of rule-making and negotiating is going on around the package of bailout bills that goes under the CARES act, and despite the chaos that surrounds the small business loan provisions, some travel industry winners and losers are starting to become clear.
And the number one big winner appears to be major airlines. The bills contain a specific provision putting aside $50 billion for them, with $25 billion earmarked for keeping workers on payroll and the rest to keep the airlines in business.
Some commentators find that part disturbing because the airlines are coming off some of their most profitable years ever, and, the critics say, could survive without a handout other than the paychecks. One condition of the money is that they maintain their route network, even if with fewer flights, but some of the airlines are already negotiating for permission to drop dozens of cities. Others, such as American, have found a new revenue source in all-cargo flights.
Aside from the airlines, travel industry businesses are in the pool with everyone else, either the small business segment or the aid to larger businesses. In some cases, the only aid still in the pipeline so far will be the paycheck money meant to keep workers on payroll, but hotels, for instance, count labor as less than half their costs.
One segment that's left out, though hard-hit, is the cruise industry. Because for years the companies have kept their ships registered in other countries where taxes and labor laws are more favorable to them, they aren't eligible for aid that's meant for U.S. companies, even though some of them are actually owned by U.S. investors. They are hoping for a new law to help them; President Trump has alternately hinted he'd support it or oppose it.
And, not strictly a travel company, but Boeing has put in for $60 billion, which it says it needs to keep its place in the airliner and defense business. Despite its troubles with the grounded 737 MAX and a small loss in last year's last quarter, the company made enough profit on the year to pay out $1.2 billion in dividends to shareholders in January.
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