AirBear

Private-jet companies could get billions in aid from coronavirus bailout

https://www.cnbc.com/2020/03/29/priv...s-bailout.html

PUBLISHED SUN, MAR 29 20204:00 PM EDT
Robert Frank@ROBTFRANK

KEY POINTS

• The $2 trillion economic stimulus package gives private-jet companies tax breaks, loans and loan guarantees.
• The aid follows a lobbying effort by private-jet companies and general aviation firms to receive a portion of the federal aid money.

Private-jet companies could receive billions of dollars in loans, aid and tax relief from the federal government as part of the coronavirus aid package.

As part of the $2 trillion stimulus bill, private-jet charter companies and jet-card companies will several types of help from the federal government. First, private-jet companies will no longer have to pay a 7.5% tax to customers. The tax, known as Federal Excise Tax, is charged to customers of private-jet charters and jet-card users. The tax won’t be charged for the rest of the year. Jet companies also won’t have to pay any fuel taxes.

Private-jet companies will also be eligible to receive funding from the $25 billion in loans and loan guarantees available to the aviation industry. In addition, they are included in the $25 billion in grant payments for the continuation of wage payments to workers.

Private-jet airports and smaller airports will also receive more than $100 million in federal funding under the bill.



The aid follows a lobbying effort by private-jet companies and general aviation firms to receive a portion of the federal aid money, arguing that private aviation generates 1.2 million jobs and $77 billion in income.

“On balance, the bill is helpful to general aviation,” said Ed Bolen, president and CEO of the National Business Aviation Association, which represents private-jet companies and owners as well as general aviation companies. “The industry clearly made its voice heard in insuring that the important provisions for general aviation, commercial operators and other small businesses were considered as this legislation was assembled.”

Yet using taxpayer funding to help an industry that caters to the wealthy has also sparked criticism. Before the bill was announced, Dean Baker, senior economist at the Center for Economic Policy told CNBC: “It’s hard to imagine anything worse. Putting up public money to support an industry that serves the rich would be hard to justify. It’s absurd.”

GeeWizDriver

It will go over like the proverbial turd in the punchbowl when the usual suspects find out...

Guard

Rumor is NJA is not eligible for bailout money as all their jets are "privately owned" and thus not available to the government for "essential business". I think XO and Flex flew more last week than NJA combined?

727C47

we wish you well : )

AirBear

As has been already stated in another thread NJA's CEO has ruled out taking any bailout money. And as far as I know NJA is not using our jets to ferry crews around yet, at least not on a large scale anyway. They do have a contingency plan for a 30-31 hub system that puts 90% of our pilots within 150 miles of a hub. That may explain why XO & Flex are flying more than us.

Guard

New gig is great, wishing you all the best as well! ?

Guard

Lot of strings attached to the bailout money that I would think would not be appealing to NJA owners and Uncle Warren?

AirBear

NJA is wholly owned by Berkshire Hathaway so it's problematic giving the Government a share of the operation. They'd have to give them shares in BH and NJA is just a very small part of that operation. And NJA Owners have contracts, if they bail early on the contract they'll get at best market value for their share. I suspect that market value is taking a plunge right now.

And that's another reason they can't furlough 1000 pilots, they need to keep enough pilots around to cover the amount of flying our owners have paid for. If a lot of owners turn in shares or fail to renew then maybe they can furlough a significant # of pilots. The danger in over furloughing is demand returning a lot faster than expected. Then the company would have to spend a lot of $$$ on sell offs, which are limited when pilots are furloughed.

multipilot

XO hasn’t begun using our own planes to ferry crews around yet. In the last two weeks, I’ve flown medical professionals to and from the NYC area, your average rich people, and even a celebrity. Our hours are down but not by too much.

So far, they’re telling us we’re in a good financial spot to get through this thing. Not sure where we’re at in terms of taking advantage of the CARES act.

AirBear

I think Fractional Jet Pilots are going to be in a much better position than airline pilots. I bet there's a lot who had apps in at airlines and didn't get a call yet, and I also bet they're going to be very happy about that. I don't see airlines making a substantial comeback until there's a vaccine for COVID-19. Only people that will fly is those that have to.