COVID-19 Global Health Emergency Impact on SIFL

The COVID-19 global health emergency began impacting the industry in the first quarter of 2020.  During the initial quarters, industry capacity was reduced faster than industry expenses.  This has impacted the SIFL rates since 2020.

In March  2020, the CARES Act was signed into law directing the Treasury Department to allot up to $25B for domestic carriers to cover payroll expenses, known as the Payroll Support Program (PSP).  The Consolidated Appropriations Act, 2021, enacted on December 27, 2020, created the Payroll Support Program Extension (PSP2) and allotted up to $15B to domestic carriers to cover payroll expenses.  The American Rescue Plan was enacted on March 11, 2021, authorizing Treasury to provide $14B in additional assistance (PSP3) to domestic carriers that received financial assistance under previous payroll support programs.  Taken together, $54B in payroll support has been made available to U.S. carriers.

We have provided two alternative SIFL calculations to account for all PSP impacts on the rate calculations.  The first calculation, Alternative 1, adjusts the rates to account for PSP Grants and the second calculation, Alternative 2, adjusts the rates to account for PSP Grants and PSP Promissory Notes. 

These calculations are for the PSP support paid out to the carriers through year-ended September 2021.  These two alternatives were last necessary to publish in August 2022 for year-ended March 2022, which were SIFL rates for the first and second quarters of 2022.

• Alternative 1:  Rates Adjusted for PSP Grants – This reduces industry expenses by the amount of PSP Grants provided to the SIFL carriers; adjustments do not factor in promissory notes or warrants issued as part of the PSP.   SIFL_Appendix_A_Alternative_1

• Alternative 2:  Rates Adjusted for PSP Grants and Promissory Notes – This reduces industry expenses by the amount of PSP Grants and Promissory Notes provided to the SIFL carriers.   SIFL_Appendix_A_Alternative_2

The Appendix B, and Appendix C SIFL time series documents continue the consistent SIFL methodology and are loaded with the standard SIFL calculation data.