Mnuchin vows to aid U.S. airlines

‘This isn’t a question of too big to fail or not too big to fail; it’s a question of if there’s short-term liquidity issues that impact lots of workers,’ Treasury Secretary Steven Mnuchin said Friday in pledging to fight the squeeze on ‘short-term liquidity.’

Treasury Secretary Steven Mnuchin said he has spoken with President Donald Trump and congressional leaders about addressing a “short-term liquidity issue” at U.S. airlines, which have lost almost half their value this year amid the coronavirus outbreak.

“The good news is the U.S. airline industry is in very good shape, it’s very efficient, and there’s a short-term liquidity issue that we’ll have to deal with,” Mnuchin told reporters at the White House on Friday.

“This isn’t a question of too big to fail or not too big to fail; it’s a question of if there’s short-term liquidity issues that impact lots of workers,” he said.

The challenge for the airline industry is that the virus has dried up demand, overwhelming the cost cutting and consolidation that followed surging jet-fuel prices and a rash of bankruptcies earlier this century.

Mnuchin said he had already met with airline bosses, though he declined to identify which ones or say what they asked for. United Airlines said Chief Executive Officer Oscar Munoz has been in Washington this week to meet with government officials and lawmakers. Industry leaders at a JPMorgan Chase conference this week stressed that they can withstand the crisis.

The Treasury chief said he has spoken with Trump, House Speaker Nancy Pelosi, Senate Majority Leader Mitch McConnell and House Minority Leader Kevin McCarthy about the need to support airlines.

“That’s something you can expect we’ll deal with quickly,” he said.

The airlines will benefit from a sharp drop in oil prices, Mnuchin said, assuming demand starts to normalize later this year. Jet fuel prices have fallen by about half this year.

Mnuchin encouraged Americans not to cancel domestic travel.

“If I weren’t so busy working, I’d be going home to Los Angeles, and I’d be perfectly comfortable getting on a commercial plane this weekend,” he said. “Despite the fact we’ve told people to shut down travel a little bit, people can travel in the domestic U.S.”

EVAN VUCCI / ASSOCIATED PRESS Treasury Secretary Steven Mnuchin arrives to speak to reporters Friday about the economic impact of the coronavirus at a White House news conference in Washington, D.C.