FOR IMMEDIATE RELEASE:
Washington, DC, April 2, 2020 – On March 30, Regional Airline Association (RAA) Faye Malarkey Black sent a letter to Treasury Secretary Steven Mnuchin and Transportation Secretary Elaine Chao, seeking flexible implementation of the Worker Relief grant provisions for air carriers under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). RAA additionally produced an accompanying policy brief detailing the $134B in economic activity per year driven by air service provided exclusively by regional airlines as well as a state-by-state breakdown of the economic analysis. Notably, regional airlines provide over 70% of the air service in the following states: SD, MS, MT, ME, KS, AL, IA, WV, ND, AK, AR, ID, NE and WY.
Although 100% of receipts under the Worker Relief provisions must be used exclusively to fund worker payroll and benefits, initial Treasury guidance requiring warrants would seem to exclude most regional airlines from participating by virtue of their underlying corporate structures. RAA’s letter cautions that the vast majority of regional airlines are not publicly traded and often have underlying corporate charters or operate under other rules that expressly forbid the issuance of government warrants, stock or equity. Additionally, RAA explains that regional airlines cannot take on debt instruments because they have no ability to generate free cash flow to service any instrument.
In petitioning for flexibility on compensation for worker relief funds, RAA’s letter warned of a scenario where regional airlines are unable to secure vital relief funds, which could disproportionately impact smaller communities by forcing the furlough of tens of thousands of regional airline workers who serve to connect those communities with the national and international air service network. RAA additionally cautioned that regional airlines provide the exclusive source of scheduled air service for smaller communities and urged the Secretaries to take steps to ensure these carriers receive adequate funds to support their workforce.
RAA President & CEO Faye Malarkey Black noted the importance of efforts to protect regional airline employees providing air service to particularly vulnerable communities: “With the CARES Act, Congress directed workforce relief funds be made available to all air carriers, and emphasized that small community air service should be upheld to the greatest practicable extent,” stated Black, “Only regional airlines serve smaller communities and Congress did not intend to leave their workforce behind.”
The Regional Airline Association (RAA) provides a unified voice of advocacy for North American regional airlines aimed at promoting a safe, reliable and strong regional airline industry. RAA serves as an important support network connecting regional airlines and industry business partners. In the United States, regional airlines operate 41% of scheduled passenger flights and provide the only source of scheduled air service to 63% of the nation’s airports.