The U.S will vote on a $900bn stimulus package which will provide aid for individuals and businesses across the country. The stimulus deal, similar to the CARES Act introduced in March, is expected to go through Congress today.
Airlines will receive $15bn as part of the package, which is part of a larger $1.4tn spending bill extending through to September 2021. The deal is set to be the second-largest stimulus package in history after the $2.2tn CARES Act in March.
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How will the package affect the aviation industry?
If the stimulus bill passes through Congress and the Senate without a hitch, airlines are set to receive around $15bn in total. As part of the conditions, carriers will be required to call back over 32,000 workers who were furloughed over the fall period.
Workers will be back on the payroll from December 1, 2020, to March 31, 2021, with no guarantees for job security after this period expires. The vast majority of furloughing took place at United and American Airlines, with both Delta and Southwest avoiding any furloughs at all.
In addition to the $15bn aid for airlines, the stimulus package will provide:
- $2bn for airports and concessionaires
- $1bn for airline contractors
- $2bn for private bus and ferry operators
- $14bn for transit
- $10bn for state highways
The $15bn set aside for airlines is significantly less than the $25bn received under the CARES Act. Additionally, as many carriers didn’t furlough any of their staff, it is unclear how much of the aid package they will receive.
Will the stimulus package be enough?
Industry leaders have been calling for a second stimulus package for a long time. After the CARES Act expired in October, U.S lawmakers have been delayed in their efforts to draft up a second package due to the November election. Another aid bill would help preserve vital jobs and give many airlines a shot at survival.
Along with over 32,000 furloughs, which includes 17,500 staff at American Airlines, Southwest claims it may be forced to furlough 7,200 staff after an agreement wasn’t reached with unions over a 10% pay cut. Despite the billions in aid carriers have already received, demand for air travel is still down over 60% according to TSA data.
Most Americans will receive direct payments
Under the new stimulus deal, most adult Americans will receive a direct payment of $600 to help encourage spending and provide regular Americans with a financial safety net. This also includes additional payments of $600 per child. There will also be a federal unemployment insurance payment of $300 per week for 11 weeks through to the end of March.
Do you think $15bn will be enough financial aid for airlines? Let us know your thoughts in the comments.