Why are major US airlines seeking government payroll grants?

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Major US Airlines Seek Government Payroll Grants Amidst Unprecedented Crisis

Major US airlines have applied for payroll grants from the US Treasury to retain employees during the coronavirus pandemic, which has been described as the most severe crisis in the industry's history. These applications are part of a broader government support package aimed at mitigating the financial impact of the crisis on the aviation sector.
Applications Submitted Under CARES Act

Airlines including American Airlines, United Airlines, Delta Air Lines, and JetBlue Airways submitted their applications for these payroll grants. The grants are made available through the CARES Act, which allocates up to US$32 billion in total payroll assistance for airlines, cargo carriers, and airport contractors. The Treasury Department is seeking compensation for these grants in the form of taxpayer equity, such as warrants or options.
Insufficiency of Funds and Daily Burn Rate

Despite applying for the aid, some airline executives have expressed concerns about the adequacy of the funds. Delta's CEO, Ed Bastian, indicated that the grants alone would not be sufficient to address the airline's financial challenges. Delta is projecting a 90% revenue decline for the second quarter and is currently experiencing a daily cash burn rate exceeding US$60 million. Similarly, JetBlue is depleting its savings at a rate of over US$10 million per day.
Conditions for Receiving Grants

To be eligible for the payroll grants, airlines must commit to maintaining their workforce until September 30 and continue a specified level of air service. The amount a company can request is tied to its total salaries and benefits paid during the second and third quarters of 2019. American Airlines, for instance, planned to request up to US$6 billion in grants, alongside an additional US$6 billion in government loans.

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Why are major US airlines seeking government payroll grants?

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