- President Trump said on Friday that the government could purchase large amounts of fuel, and pre-purchase plane tickets for government use, in an effort to help struggling oil companies and airlines.
- The remarks came during comments to the White House press pool.
- US airlines are now receiving aid under the coronavirus CARES Act, but oil companies have been hit by reduced demand in recent weeks.
- Visit Business Insider’s homepage for more stories.
During comments to the White House press pool on Friday, President Donald Trump suggested that the US government could look into advance purchases of fuel and flights as a way to help struggling energy companies and airlines.
“That industry got unnecessarily hurt,” he said, referring to the oil industry.
The oil industry has been in turmoil for several weeks as fuel demand plummets due to people around the globe staying home because of the coronavirus pandemic. Pricing wars and tepid markets have also contributed to a pricing crisis for the industry, which saw futures fall into the negatives earlier this week.
Similarly, the global airline industry has seen revenue effectively dry up as travel comes to a halt around the world.
Although the first major federal financial assistance program related to the pandemic, the CARES Act, offered up to $50 billion of aid for US airlines, an oil company bailout did not appear to be imminent. Treasury secretary Steven Mnuchin said that the government was looking at alternatives, including taking stakes in energy companies.
“You can assume that’s one of the alternatives.”
Trump added that the US government could make massive purchases in order to offer liquidity to the companies without providing typical “bailout” aid. He said that could include filling the country’s strategic reserves.
Although airlines are in relatively stable position for the next few months under the CARES Act and as they seek to raise cash from other sources, including their frequent flyer programs, Trump said that the same idea of pre-purchases could apply to airlines.
It was not immediately clear what those pre-purchases could look like, although they would presumably be for vouchers or credits that could be used for government travel once social distancing guidelines and governmental work travel restrictions are lifted.