A bipartisan group of senators has revealed a relief plan that includes $17 billion for airlines. Despite payroll support ending at the end of September, airlines continued to lobby hard for government support. However, while there was some appetite to support the industry, it has not led to any new relief bills, leading to involuntary job reductions.
Additional aid for airlines
Reuters states that the new $908 billion relief proposal will include $17 billion for four months of payroll support for airlines, according to a spokesperson for Senator Mark Warner, a Democrat from Virginia.
The $17 billion is part of $45 billion earmarked for transportation, including $15 billion for transit systems, $4 billion for airports, $8 billion for private buses, and $1 billion for Amtrak. The money is expected to last four months, according to West Virginia Democrat Senator Joe Manchin.
Republican Senator Mitt Romney stated he had spoken with Treasury Secretary Steve Mnuchin about support for airlines. It is currently unclear if there is White House, industry, or legislative support for this bill, which is one of many that have come about since the first round of support after the crisis hit.
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Payroll support through early 2021
The four months of payroll support would cover the industry through early 2021. If enacted in December, it would last the carriers through March, leading into the summer 2021 travel season. This would be roughly in line with when airlines were asking for a second round of industry support to last until.
In October, American Airlines’ CEO, Doug Parker, stated he believed the airline would only need another six months of government support to keep critical infrastructure in place. He stated that he expected the industry to be in a much better spot than it was in October, and it would be heading into a strong season for airlines.
What about actions airlines have already taken?
Tens of thousands of industry employees are out of a job, most either having elected to take unpaid leave or else involuntary furloughs. While airlines early on stated they would bring those people who left involuntarily back after the first round of furloughs, which hit hard on many groups of workers, it is unclear if that is a requirement in this bill. It could be that, for airlines to get aid, they would need to recall all furloughed personnel.
Other actions airlines have taken include suspending services to many small and regional destinations across the United States. Many carriers cited a steep drop in demand, no government mandate to serve the routes, and no form of industry support to keep flying profitably to those cities.
In the first round of industry support, airlines had to operate minimum service levels depending on how many times they traditionally flew to certain destinations and in what season. While there were options for carriers to receive waivers to drop certain cities from their network temporarily, those were hard to come by for a lot of airlines.
It would not be surprising to see that provision make its way back in this bill. That would ensure that airlines continue to keep certain small cities connected with essential shipping and passenger air corridors open.
Will this pass?
There is an appetite for a relief bill in Congress, but there has been one for several months after it became clear the first round of support would not last through the bulk of the crisis. Whether this becomes another dead bill, however, depends on what levels of support it gets from members of Congress, the White House, and outside industry groups. Several bills have come and gone.
A massive package like this will have to undergo a few rounds of alterations. Some elected officials, industry groups, and government officials seek more or fewer funds in certain pools. Whether the bill even gets to that stage, however, is dependent on whether Congressional leadership or the White House throw their support behind the bill. For now, this is just a proposed bill.
Do you think this package should be approved? Should airlines get more money in relief? Let us know in the comments!