WASHINGTON/CHICAGO: Major US airlines plan to make a last-ditch bid to persuade Congress to grant them a new US$25 billion bailout to help avert thousands of employee furloughs set to begin Oct 1, even as a separate US$25 billion in government loans for the sector sits untapped.
The chief executives of American Airlines, United Airlines and JetBlue Airways and major aviation unions were scheduled to hold a news conference on Capitol Hill on Tuesday afternoon calling for a six-month extension of a payroll support program that consisted primarily of grants in exchange for keeping workers on the payroll.
On Monday, two key Republican senators introduced legislation that would authorise another US$25.5 billion in payroll assistance for passenger airlines, but congressional aides said it was unlikely to win passage given aid requests from many other struggling industries.
The first US$25 billion in payroll assistance to airlines was included under the US$2.3 trillion CARES Act aid package in March, which also set aside another US$25 billion in government loans for airlines.
The Treasury Department signed letters of intent in July with 10 major airlines for the loans, which they can tap by Sep 30. According to Treasury, none of those loans have been funded.
Only American Airlines has said it intends to take the loans, which carry restrictions on share buybacks and executive compensation.
Airlines for America, a trade representing major US airlines, said passenger volumes remain down approximately 70 per cent, a third of the US fleet is idled and the industry continues to lose US$5 billion in cash per month.
"We are running out of time to protect the jobs and livelihoods of these men and women. We urgently need for Congress to act now," the group said.
Representative Jim Himes, a Democrat, said at a hearing Tuesday that taxpayers should be fairly compensated for the use of government funds to support private businesses. He said that on a call with lawmakers, he proposed requiring more taxpayer compensation for airline support and that faced opposition from labour unions and airlines.
The industry message, Himes said, was, "If you make the money cost anything, theRead More – Source