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U.S. rotorcraft industry members should apply as soon as possible if they want to take advantage of two federal programs offering financial support through the COVID-19 crisis, according to experts from Helicopter Association International (HAI).
“We’re experiencing global events that are affecting your lives and our industry in ways most of us never imagined,” said Jim Viola, president and CEO of HAI, in opening the first of a series of webinars the association is planning to help its members through the crisis. “We at HAI understand that information on how the government is trying to help is changing daily, and even then, the new information for our industry may be very difficult to find.”
Robert Lakind, an aviation attorney and member of HAI’s safety committee, highlighted the potential for financial support through the Paycheck Protection Program (PPP) and the Air Carrier Worker Support (ACWS) Program. The two programs, created as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act are currently accepting applications and are being processed on a first-come, first-served basis.
The PPP makes $349 billion available for loans, which may qualify for 100 percent forgiveness if certain criteria are met.
The potential payout is 2.5 times a company’s monthly payroll (excluding any compensation to an individual employee over $100,000) to a maximum of $10 million per company.
The PPP can be used for several uses, including payroll costs, mortgage interest, rent and utilities.
The money is provided in the form of a two-year loan, with a one percent interest rate. However, the interest is deferred for six months.
The program is available to companies with 500 employees or less, and sole proprietors and tax-exempt companies are also eligible. To qualify, companies must have been in operation on Feb. 15 and had employees that were taking some form of compensation.
Supporting documentation will need to be provided for loan forgiveness, and the amount of the loan that will have to be repaid will increase if staff at a company are laid off, if payroll is reduced more than 25 percent, or if more than 25 percent of the loan is used for non-payroll purposes.
The Air Carrier Worker Support program provides $25 billion to support salaries of air carrier employees, which a part 135 operator or part 145 repair station would qualify for.
The loans are equal to six months’ worth of employee salaries, but can only be used for employee compensation, and companies must not reduce staff or compensation before Sept. 30, 2020.
Finally, Lakind encouraged operators to see if they could be considered an essential service with local authorities, check their insurance policy to see if there was anything to help cover the current conditions, and suggested they contact banks if they have financed aircraft to see if they would defer payments.
Despite the current challenges, Lakind struck an optimistic note as he looked ahead to the industry’s emergence in the post-COVID world.
“Economists are saying the fundamentals of the economy are sound, and additionally there are just tough participants in this industry — we know how to problem solve,” he said. “I think there’s no doubt that the industry will be back and probably back sooner than you expect. But right now, we do need a little bit of some bridge gap — something to help us get through.”