IATA: Airline Industry Needs $200B In Emergency Support
QUEST: We know the economic situation is pretty dire. Joining me now on the line is that of the OECD Angel Gurria. Are you -- good to have you with us. Are you -- are you satisfied that enough is being done? I know plenty is being done. But are you satisfied it's enough at this particular point, Angel?</s>JOSE ANGEL GURRIA, SECRETARY GENERAL, OECD (via telephone): I think we're going to be having to do this day to day. But no, because I think more international coordination, more international cooperation is necessary. And there's also a question of the allocation of these huge billionaires, trillionaire amounts that were being announced. The question is, how they're going to be allocated, where to which sectors. And last but not least, it's all a lot about liquidity. It's a lot about loans and credits, those have to be repaid. But those will not get you out of trouble when you basically have run out of demand, because here we have a problem of this shock, double shock of supply. Yes, but there's also a very big, big contraction of demand. So, we're still -- the jury is still out, but it's good that everybody is putting so much of the armory on the table.</s>QUEST: Right. So, with that in mind, I mean, the idea of handing out checks to people where -- or in some shape or form, do you support that?</s>GURRIA: I think the -- this is a different situation. It's a different type of crisis. And yes, there will be a moment where we will not be able to discriminate very carefully, who gets the checks and who doesn't get the checks, but it's worth, you know, erring on the side of caution and making sure that you support all the people who are being affected because that is happening day to day today. So, yes, I would say let's go and do it in a very generous and flexible way. It's a better way rather than leaving a lot of people out because they will pull off</s>QUEST: All right. The time, unfortunately, is short, but Angel, finally, how bad will this global recession be?</s>GURRIA: It will be bad because it will prolong beyond the time in which the, you know the coronavirus will be gone. Hopefully, a few more weeks, maybe a few more months, but then the recession and the economic impact will last over the whole of 2020, perhaps even at 2021 and beyond. So, this is why we have to throw everything we got at it now, and why there is this need for international coordination.</s>QUEST: Angel Gurria, thank you. It is a busy day. Apologies that we're keeping it short. President Trump is pledging to support U.S. industries hit hard, and he's promised aid to the travel sector. Earlier, he said this.</s>DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We will be helping the airline industry, we will be helping the cruise ship industry, we probably will be helping the hotel industry. We'll probably be -- where jobs are created. You don't want to lose industries like this. These are incredible industries. You can't lose them.</s>QUEST: Joining me now to talk about this is Sara Nelson. She is the International President of the Association of Flight Attendants. She joins me now. Sara, and you've -- I've read what you've written and the letters that you've sent. If help is given to the airline industry, what sort of restrictions or strings do you think there needs to be, to make sure the money gets spent properly?</s>SARA NELSON, INTERNATIONAL PRESIDENT, ASSOCIATION OF FLIGHT ATTENDANTS: Well, I think, Richard, that we need to think even broader than that. We need to think about the fact that every other time that there has been a bailout, that has gone to corporations and banks, real people have not gotten the help that they need. And especially in a crisis like this, a healthcare crisis, we need as many people who are strong and healthy to be able to help themselves so we can focus on the sick and vulnerable, and attack the crisis.</s>QUEST: Right.</s>NELSON: So, that is why we have put forward a plan that says that the economic package needs to start first, with a payroll package, to keep the paychecks going. We don't need the federal government to be the H.R. solution. We can use these companies, especially in the airline industry as a template to continue the paychecks through a payroll subsidy from the government.</s>QUEST: But now -- I mean, it's an industry that has completely been destroyed to some of the road networks to look at the amount of route slashing, and your members must be extremely badly hit by this, some of them not knowing whether they're going to have a paycheck next week.</s>NELSON: This is really, really bad, Richard. And in fact, we've had two airlines that have fallen casually -- casualty to it just today. The airlines will run out of money for payroll in two months, if not a couple weeks, and some of them sooner than that. And this -- think about this, 30 days ago, United Airlines was announcing a training academy. They were -- the airlines were planning to hire 100,000 people. Delta Airlines was celebrating its profits with checks to its employees. And in 30 days' time, they are going to run -- they are in a place where they're going to run out of cash.</s>QUEST: So, the blame game is never nice, and it's probably inappropriate now, but the critics who say don't bail out the airlines because they wasted so much money on their own share buybacks, the same thing with Boeing. And what would you say to somebody -- I've got dozens of e-mails, by the way, telling me, don't bail out the industry. They shouldn't have done share buybacks.</s>NELSON: OK. So, we agree, they shouldn't have done share buybacks, and we fought them every single time. And that's why our relief package is focused on workers first, continuing the paychecks and loans from the government with certain stipulations. They must agree to no stock buybacks. We need to have a cap on executive comp, and no bonuses during this time, no dividends. And they also need to not spend any money on fighting their unions. We also need to make sure that this package -- make sure that there's no breaking union contracts.</s>QUEST: Do you -- do you fear that one of the majors and the four big ones, you know, United, American, Delta, Southwest, and we can put in a couple of others, as well, do you -- do you fear, bearing in mind what we're hearing, one of them could go -- would not go out of business but would need to seek protection from chapter 11.</s>NELSON: This is bigger than any crisis we've seen in the past. So, it's well beyond that, Richard. We are days away from a collapse if we don't do something. And that's why Congress is taking it very seriously. That's why I'm spending all my time today, throughout the weekend working on this package.</s>QUEST: Sara, thank you, good to see you in such difficult circumstances. Let's stay in touch so we know and we can follow what's happening in the future.</s>NELSON: I appreciate it.</s>QUEST: And that's QUEST MEANS BUSINESS for tonight. We got it all in. Well, of course, these are difficult times, important times. I'm Richard Quest. And we will update you. You'll see the closing markets in just a second or two. And whatever you're up to in the hours ahead, yes, I hope it's profitable.