ARSA Proposes $11 Billion+ MRO Industry Relief Package
In the wake of severe aviation distributions due to the coronavirus, the Aeronautical Repair Station Association (ARSA) has proposed a maintenance, repair and overhaul (MRO) industry relief package to Congress and the president designed to ensure repair stations can continue to pay employees and to encourage airlines to continue to contract for maintenance during the downturn.
In a March 17, 2020 letter to President Trump and House and Senate leaders distributed to all congressional offices, ARSA said it is hearing from members concerned about cashflow in light of maintenance work being canceled and customers potentially unable to pay bills. The maintenance industry – which includes Federal Aviation Administration-certificated repair stations and parts manufacturers and distributors – employs more than 250,000 workers nationwide and generates approximately $50 billion in direct annual economic activity.
As lawmakers huddle to craft economywide and industry specific relief legislation, ARSA is proposing a 50 percent tax credit for airline contract maintenance work performed at U.S. repair stations between April 1 and Dec. 31, 2020. The association said that historically, tax incentives such as the highly successful depreciation bonus created after 9/11 have stimulated economic activity by encouraging businesses to shift future purchasing into the present. The temporary tax credit ARSA is proposing would encourage airlines to continue to contract for maintenance during the anticipated downturn.
ARSA is also urging the administration and Congress to provide repair stations with $11 billion in relief split between grants ($9 billion) and loans or loan guarantees ($3 billion). These amounts would help ensure repair stations are able to maintain their present workforce for the next six months, which will be essential to having the necessary capacity to perform maintenance when commercial aviation activity returns to normal and preventing large industry job losses that would put additional pressure on existing government benefit programs. (e.g., unemployment insurance).
ARSA also pointed out that the maintenance industry has long been suffering from a severe and well-documented technician shortage and maintaining a highly trained workforce is critical to ensuring the long-term stability of the entire U.S. aviation sector.
“The simple fact is that we don’t know how long the coronavirus disruptions will last and what the impacts will be,” ARSA Executive Vice President Christian A. Klein said. “Congress needs to act swiftly to limit damage to the aviation maintenance industry, which has both a huge impact on the economy and which is so essential to the safe operation of aircraft.”
To read ARSA’s full letter, click here.
