The CARES Act, which set aside $58 billion for commercial and cargo aviation. The airline set-asides included $29 billion in payroll support grants and $29 billion in loans to passenger and cargo airlines.
This is the same legislation that created the Small Business Administration “Paycheck Protection Program” commonly referred to as PPP. PPP was initially funded with $349 billion in March, and $310 billion was added in April to support the ongoing operation – especially employment – of businesses in most cases that have fewer 500 employees. The Small Business Administration has now released some details on forgivable loans of $150,000 or more.
I was curious to see if there was any ‘double dipping’ by airlines, taking advantage of their own dedicated payroll support and also PPP funds which were meant to allow small businesses to continue to pay their employees. It turns out there was.
Searing for “airlines” and “airways” I found 10 of the 287 airlines which received CARES Act funds for payroll also received Small Business Administration PPP loans provided for in the CARES Act. There may be others – I did not search the airlines individually, one by one.
- Silver Airways received $13,616,171 CARES Act payroll support and a $5 – $10 million PPP loan
- Elite Airways received $11,276,814 CARES Act payroll support and a $2 – $5 million PPP loan
- Eastern Airlines received $9,259,648 CARES Act payroll support and a $2 – $5 million PPP loan
- Caribbean Sun Airlines received $6,127,638 CARES Act payroll support and a $2 – $5 million PPP loan
- Air Wisconsin received $40,998,013 CARES Act payroll support and a $5 – $10 million PPP loan
- Lake and Peninsula Airlines received $332,063 CARES Act payroll support and a $150 – $350k PPP loan
- Sierra Pacific Airlines received $931,741 CARES Act payroll support and a $350k – $1 million PPP loan
- Tropic Ocean Airways received $2,038,790 CARES Act payroll support and a $1 – $2 million PPP loan
- Pro Airways received $563,716 CARES Act payroll support and a $150 – $350k PPP loan
- Wings Airways received $621,346 CARES Act payroll support and a $150 – $350k PPP loan
Taking dedicated CARES Act payroll support and also PPP loans may create accounting challenges in seeking PPP loan forgiveness but worst case allows these airlines access to 1% financing – which is cheaper than the $29 billion in separate subsidized CARES Act loans set aside for them to apply for.
Along the way I came across many interesting things in the Small Business Administration data, including several businesses with ‘airlines’ in the name that didn’t receive payroll grant support.
Two interesting names receiving PPP loans: Guacamole Airlines received a $150,000 – $350,000, and Jet Airways of the United States received a $150,000 – $350,000. Jet Airways of India of course is no longer in business, with their frequent flyer program rebranding as InterMiles.
Guacamole Airlines does not have a website. I did find a twitter account though it doesn’t seem to have a relationship to the entity that received the PPP loan.
They have an address in Los Angeles that appears to be Escuela Taqueria. I’d actually consider flying an airline that served a really good seat-side guacamole once the pandemic is over. And tacos. Love tacos.