A U.S. Treasury Department clarification eases the path for small passenger air carriers to access payroll support under the recently adopted CARES Act. Treasury Secretary Steve Mnuchin on April 10 confirmed that carriers with a payroll under $100 million are not required to provide financial instruments as appropriate taxpayer compensation for assistance under the Air Carrier Worker Support Program.
“As such, for passenger air carriers with payroll support payments up to $100 million, funds will be available promptly upon approval of their applications,” the Treasury Department said, announcing the determination.
The department has received more than 230 applications for payroll support from a range of passenger air carriers. Most of the requests are seeking less than $10 million, the Treasury Department said, adding that the determination was made in consultation with both its and the Department of Transportation’s financial and legal advisors
“The Payroll Assistance Program is critical to providing much-needed relief to Americans who work in the aviation industry,” said Mnuchin. “Small and medium-sized passenger aviation businesses are particularly vulnerable to the disruption from Covid-19.”
In addition, the Treasury Department is working with 12 carriers with payrolls exceeding $100 million on securing the financial instruments to compensate taxpayers, it said.
The determination was widely lauded by the business aviation community. “We appreciate [the Treasury Department’s] consideration of the diverse and unique nature of Part 135 operators and work to expedite relief to the employees of these vital and essential American companies,” said National Air Transportation Association president and CEO Timothy Obitts. “We look forward to continuing to work with the secretary and his staff to provide similar relief for small businesses that are Part 135 air cargo operators and other aviation businesses, including FBOs that provide ground handling services to the commercial airlines, who have filed applications for relief under the same Subpart B of the CARES Act.”
“We appreciate the significant efforts of Treasury Secretary Mnuchin and Transportation Secretary Chao to understand the unique financial challenges of general aviation air carriers and provide additional flexibility while ensuring that taxpayers are properly compensated,” agreed NBAA president and CEO Ed Bolen. “These companies are often small and midsize businesses that support jobs and economic investment in their local communities.”
Applications will be accepted until 11:59 p.m. on April 27. Those received after that time may or may not be considered, NATA cautioned. Further, NBAA advised that recipients of the air carrier payroll assistance must meet minimum service requirements, limit share buybacks, meet executive compensation limits, and refrain from furloughs.