The Trump administration needs to form an aviation task force immediately to rescue the airlines and Boeing from the coronavirus collapse

• The US airlines and now Boeing are signaling that they need a bailout as the COVID-19 coronavirus outbreak ravages their businesses.
• The situation is similar to the 2009 bailouts and bankruptcies in the US auto industry, involving GM and Chrysler.
• During the financial crisis, the Obama administration formed an Auto Task Force to manage the orderly reorganization of the industry.
• The Trump administration, with congressional support, needs to form an aviation task force immediately to rescue this critical American industry.
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The major US airlines - Delta, American Airlines, United, and Southwest - need a bailout and they need it fast. The second-tier is also in trouble, as the COVID-19 coronavirus is effectively emptying the skies.

Boeing is also struggling, in the aftermath of its 737 Max debacle. Don't forget that Boeing is also a huge supplier to the US military; it's always been the definition of too big to fail.

The situation makes the auto bailouts of 2009, when the financial crisis was raging, look like a walk in the park. General Motors and Chrysler were both bailed out and went bankrupt back then - Ford didn't, but it packed on $24 billion in debt before credit markets seized up.

But even as US sales plunged to 10 million vehicles in '09, the plants continued to operate, and people were able to leave the house to buy or lease a new car.

The Obama administration formed an Auto Task Force during the Great Recession, overseen by former investment banker Steve Rattner and run out of the US Treasury Department. It was very effective in managing Chrysler into a merger with Fiat and in guiding GM back to a 2010 IPO.

But it was also a 24/7 undertaking, with a vast number of moving parts, ranging from Obama essentially firing the-CEO of GM to negotiating with irate, combatant bondholders as well as the United Auto Workers, to organizing the complex financing that would see both companies through the crisis.

It cost $80 billion.

Getting the airlines and Boeing through the coronavirus pandemic is going to cost more. Possibly much more.

Federal coordination is imperative

It's imperative that the Trump administration recognize the need for this to be federally coordinated. The airlines form a national utility and Boeing is the crown-jewel of American manufacturing. What made the auto bailouts work, more or less successfully, was central coordination and strong leadership, from "car czar" Rattner and his chief lieutenant, Ron Bloom, who tackled the labor side. What might have been chaos was instead and orderly stabilization of the key US industry.

Trump himself probably doesn't have the ability to manage this, so the job falls to Treasury Secretary Steve Mnuchin, who should have Rattner on the phone yesterday. Mnuchin should be able to get support from House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer, both of whom weathered the 2009 crisis and the automaker bailouts.

What's unclear is whether the aviation industry requires Chapter 11 - debt levels are too high in the industry, and the airlines have sabotaged their balance sheets with share buybacks - or a very, very large form of emergency bridge financing. In essence, the government would wind back the clock to a time before deregulation, when the airlines were more like flag carriers, providing an essential transportation service, like the water and electric companies.

Chapter 11 would offer a fresh start, something the airlines might need given their debt loads. But the process might not be fast enough to backstop the system, which really needs to have its decimated cash flows replaced.

This is going to demand a near-wartime effort. An Aviation Task Force must be formed as soon as possible.