Washington CNN  — 

The US aviation industry and the Trump administration are in a pitched battle over the response to the coronavirus pandemic, three sources familiar with recent calls between officials from several government agencies and US airlines have told CNN.

In a series of contentious conversations, agency officials and aviation executives have clashed over the administration’s demand that airlines collect new kinds of data from passengers to help officials track potential virus carriers.

Airlines say they can’t meet that demand right away – a claim some administration officials say they don’t believe, according to several sources who tell CNN the calls have deteriorated so badly that agency officials have issued threats, spat expletives and accused airline executives of lying. It is an “epic battle,” said one source familiar with the talks.

On one call, an administration official pointed to potential fines if the airlines didn’t comply, according to two sources. The Federal Register, where proposed rules are published, laid out the new requirements for added data collection and listed penalties that include fines as high as $500,000 as well as jail time of up to a year.

Centers for Disease Control and Prevention officials have even threatened recommending that the administration try to ground planes in the US if they can’t get the passenger data, according to one source.

‘Shock and disbelief’

The administration officials’ vitriol has left airline officials in a state of “shock and disbelief,” one source said. Government officials have displayed “a lot of ignorance about what is possible,” the source said. Others familiar with the talks contend the airlines seem to be acting unreasonably by not providing the data more quickly.

Another factor adding to the friction is that the administration is considering an advisory discouraging Americans from commercial air travel. Airlines oppose this because of the body blow it would deal their industry, according to four sources familiar with the discussions.

The battle over data is raging as the administration is coming under fire for failing to move quickly or competently enough to protect Americans from a virus that has already killed thousands worldwide and is beginning to hit the US, with more than 500 people infected and 22 dead.

The anger and recrimination are fueled by the fact that for both the White House and the airlines, CoVID19 – the coronavirus that has infected about 108,000 people worldwide and killed around 3,500 in 93 countries – poses a profound threat.

The international aviation industry could face losses north of $100 billion if the virus isn’t contained soon, with revenues and ridership already plummeting.

In the White House, President Donald Trump has seen stock markets sink, a development that could undermine a central plank of his re-election campaign: that his presidency has delivered a thriving economy.

On Friday, the White House signaled it could offer an olive branch and take steps to ease the financial strain on US airlines by deferring taxes. Airlines, concerned about complicated privacy issues the data collection may pose, have tried to meet the administration halfway, proposing to develop an app and website for data collection.

For now, though, tensions remain high as the two sides remain far apart as both struggle to deal with the pandemic and the airlines brace for the fees and other punitive measures the White House might implement starting March 14.

“If the focus is doing it exactly the way the administration wants, it will be a long negotiation,” said Washington Rep. Rick Larsen, the Democratic chair of the House aviation subcommittee. The “airlines don’t have all the information the CDC wants,” Larsen said.

The standoff over data goes back years, said one source, who added that the CDC seems to be using the coronavirus outbreak to force airlines to agree to its demands. The broader debate is about what role airlines should play in determining if their passengers have been exposed to the disease.

This newest surge of friction began a few weeks ago, after the Presidential proclamation in late January that essentially banned any foreign national from entering the US if they had been to China within the previous two weeks.

In a series of calls, the administration told airlines they had to comply with a directive to ask travelers if they had been to China within the past 48 hours. CDC had initially wanted passengers to answer 22 fields of information but narrowed that to five questions about passengers’ contact info. They are particularly interested in recent visitors to China, Italy and South Korea.

Aviation executives said they don’t have the technology to do that digitally, explaining it would take six months to make the necessary technical fixes. They could, however, use paper, they said. An official from the Centers for Disease Control accused the airlines of lying, according to two of the sources, and of not stepping up to the plate, leaving the industry executives reeling in shock.

The blowups between administration officials and the airlines have continued, occurring more recently over the requirement that airlines collect more passenger and crew data than they normally would, including email addresses, phone numbers and addresses to help track potential coronavirus carriers.

The demand is a difficult one for airlines for technical reasons as well as privacy issues, particularly in Europe.

But during conversations about the new data requirements, CDC officials made a point of telling the airlines about $250,000 fines they would have to pay if they do not start complying by mid-March. The Federal Register listing that sets out the new requirements also notes that penalties could include criminal charges and up to a year in jail.

Heated calls

Individual airlines often had security or IT officials on the calls to explain technical issues as needed, but the calls got so heated at times that airline representatives themselves piped up.

“There were several calls between the airlines and the US government about this new data collection process, which was initiated in response to the novel coronavirus outbreak,” said a CDC spokesperson. “We understand that any new process can be challenging to implement quickly, which is why the rule is currently open for public comment. Airlines have been encouraged to provide feedback through that public comment process.”

The calls between airline executives and the agencies are set to pick up before the March 14th deadline, though no date has been set.

Airlines for America told CNN that the airlines “appreciate the collaborative dialogue with the US government to further our shared goal of protecting the safety and well-being of all travelers, which is – and will always be – the top priority of US carriers. We look forward to continuing to coordinate and work collaboratively with the top leaders in the Administration and across federal agencies to assess the best next steps.”

Before the coronavirus outbreak, airlines were expected to share information they had in their records. The new change means they must collect the information the administration seeks. One airline official told CNN they now feel under the gun to compile the data because the administration could ask for it at any point.

Another industry official familiar with the calls said, “what may seem simple in a world of apps and other things in which it seems like everyone has information about you, it is not simple.”

This industry official says it took the US aviation industry two years to meet post-9/11 requirements, which also involved data collection.

Airlines are concerned that the Federal Register gives no clear end date on the data collection and worry that the US government could continue forcing them to collect it “for other purposes.”

“It seems they want us to do this for forever and we are pushing back,” the first source familiar said. The airlines – particularly their lawyers – are worried about what Customs and Border Protection officials will do with the information.

They are also concerned about lawsuits from other countries, particularly given European Union privacy restrictions. “The industry isn’t interested in creating a system that would get them in trouble with EU privacy rules,” the industry official said, adding that’s been a problem for airlines before.

Better ways to trace passengers

Airlines asked the agency officials if the government would back them in the event of lawsuits and were told the administration would offer no support, according to the first source familiar. This source added that one US official told aviation executives their privacy concerns were “bullshit” because no country would push back on the collection of information given the threat CoVID19 poses.

The White House was aware of the rising tensions on these calls when it invited aviation CEOs to meet with Trump and Vice President Mike Pence Wednesday last week in an attempt to resolve the data sharing issues, according to third person familiar with events.

The White House meeting itself was not contentious, according to people familiar with it.

Airlines for America offered Trump a counter proposal for collecting data, telling him about an app and a website they are developing that would help the CDC get information more quickly, the group’s president said after the meeting.

Nicholas Calio, the president and CEO of Airlines for America, said the association felt there were “better ways to trace the passengers coming in” from places with high rates of the coronavirus.

“We’ve contracted to have a mobile app and a website developed that everybody would have to fill in that would go directly to the CDC with that information and we’re moving forward with that,” he said.

The airline executives also used the opportunity to ask Trump and other White House officials not to publicly discourage Americans from taking flights, saying their businesses would be at risk if the government begins warning against commercial air travel.

Airlines are already reeling, canceling planned routes due to declining demand and projecting steep losses, with the International Air Transport Association saying the outbreak could cost the industry as much as $113 billion worldwide.

Despite the potential economic blow, Trump dismissed the idea of a bailout after the meeting last week. “Don’t ask that question please, because they haven’t asked [for] that,” Trump told a reporter. “I don’t want you to give them any ideas.”

But White House officials are considering deferring taxes for industries hurt by the coronavirus, including aviation, two people briefed on the discussions said.

White House economic adviser Larry Kudlow said Friday the “measures that would be targeted toward individuals or small businesses or perhaps some industrial sectors. That’s on the table… we are in the discussion and planning phase.”

CNN’s Geneva Sands, Nikki Carvajal, Kevin Liptak and Jacqueline Howard contributed to this report