With the US aviation industry collectively holding its breath as it awaits a decision on a further stimulus package, we’ve heard from JetBlue COO and president Joanna Geraghty about her thoughts on the outcome. The JetBlue boss remains ‘cautiously optimistic’ that the government will do the right thing but warns that a rapid decision is needed if thousands of jobs are to be saved.
Will CARES 2 cover airlines or not?
One of the biggest unknowns facing the US aviation industry right now is whether the CARES Act will be renewed. The Coronavirus Aid, Relief, and Economic Security Act saw around $25 billion being earmarked for passenger airlines, used to ensure networks were maintained and workers kept their jobs.
However, the current CARES funding runs out on October 1st. Airlines have been lobbying for a second round of funding, as the situation in the US remains volatile. Whether it will be granted is still unknown, and with only a week to go until the day of reckoning, airlines need an answer soon.
Speaking at yesterday’s World Aviation Festival, JetBlue president and COO Joanna Geraghty said she remained ‘cautiously optimistic’ that the package would be granted. She said,
“From our perspective, it appears that there is tremendous support for CARES Act 2. If you look at CARES Act 1, that was really about saving the industry. CARES Act 2 is about saving jobs. We do believe that there is strong momentum behind it … we expect this will go down to the line just as CARES 1 did, but we are cautiously optimistic.”
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No time to waste
With October 1st drawing ever closer, airlines were obliged to send out WARN notices to thousands of employees. While many have made strides to save as many jobs as possible, the numbers of jobs at risk next week remains extraordinary. Geraghty drove home the need for action sooner rather than later, saying,
“October one is the date where CARES one expires. As of that date, a lot a lot of carriers have indicated they intend to furlough really vast amounts of employees.
“At JetBlue, we hope not to furlough anybody through the end of the year. We’ve been able to take a number of voluntary measures, but the industry really does need that CARES support to protect those nearly 10 million jobs in the United States that the airline industry represents.
“Further delay is really going to put [airlines] under pressure. In order to save jobs, the CARES Act 2 to really does need to be sorted out well before the election, if not before October one.”
The government will do the right thing
While the industry waits for the outcome of the US government’s decision, Geraghty remains hopeful that the decision will swing the right way. She cited the industry’s 5% contribution to the nation’s GDP, valued at $1.7 trillion, as a reason for senators to back the new bailout. She said,
“I would say we’re cautiously optimistic that the government will do the right thing, will recognize the importance of the US airline industry. Without the airline industry and without all the jobs in the airline industry, it’s very difficult to see the economy recovering in a meaningful way.
“We believe that most of Congress recognizes the importance of the airline industry and does support the CARES Act. It’s just a matter of getting it over that final hurdle.”
So far, things have not been going so well. Senator Roger Wicker introduced legislation earlier this week that would see a further $25 billion released for passenger airlines. However, when he tried to fast track it through congress, the move was derailed after some senators objected.
There could still be a last-minute agreement forged. For the US airline industry, it’s the outcome that is desperately needed to save thousands of American jobs.