Senators Seeking $25 Billion Airline Bailout

August 6, 2020
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Airline travel in the United States has hit a record low during the Coronavirus Pandemic. With the threat of staff furloughs and mass groundings, a group of Senators is now recommending a $25 billion package to bail the airlines out.

President Trump is backing the suggestion, telling reporters this week that America can’t afford to lose its transportation network.

Funding Could Be Added to a New Coronavirus Aid Package

Senate and House leaders are currently negotiating an agreement to extend the Paycheck Protection Program and federal unemployment benefits. A group of Republican Senators asked party leadership on Wednesday to add $25 billion in direct assistance for airlines to the package.

Support for an airline bailout is largely bipartisan. Dick Durbin, the second most senior Democrat in the Senate, has openly supported funding more payroll support for airlines. A majority of members in the House of Representatives are also in favor of extending payroll support.

Sweeping Job Losses Without Congressional Funding

Over the last week, airline passenger traffic was just 27% of what it was a year ago. Numbers had jumped slightly in May and June, before falling again as Coronavirus infection rates increased.

Between major airlines like Southwest, United, and American Airlines, up to 76,000 employees could be furloughed from October 1. These furloughs could turn to permanent redundancies if the demand for air travel doesn’t recover.

A further 150,000 workers across the major airlines have already agreed to take periods of voluntary leave. Some staff approaching the ends of their careers have been offered early retirement packages.

The government is already paying hefty subsidies for unemployment support. Offering direct aid to airlines could prevent an increase in unemployment claims.

If funding isn’t included in the Coronavirus Aid package being negotiated this week, it could make it into a government spending bill due in September.

White House Backs Aid for Airlines

President Trump supports a bailout for the airlines, saying this week that “I’d be certainly in favor.”

It is expected that a new aid and stimulus bill will be agreed between parties this week, potentially allowing for voting next week. Any additional funding for airlines could help to boost airline stocks as well as those of suppliers and ancillary companies in the aviation industry.

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