COVID-19: US airlines evaluate pros and cons of government aid

As demand for air travel continues to hit nearly zero and estimates for a recovery continue to move the right, US airlines are quickly evaluating how to utilise a package offered by the country's government designed to keep their workers employed. And, if airlines agree, how to make use of loans with strings attached that could ultimately be deemed unattractive, including the result that the government potentially takes stakes in airlines.

The industry's participation in the government's support package remains tough to predict. It is a safe assumption that most airlines have no desire for the government to have a direct say in how they run their respective businesses, especially when the new normal of post-COVID-19 settles in.

Before the onset of the crisis most US airlines had reasonable liquidity positions, and they have rushed to the markets to access more cash to withstand the pandemic.

But credit markets will quickly dry up, and now airlines have to look into a murky crystal ball to determine whether their current liquidity levels will enable them to overcome the crisis without tapping federal loans.