Trump urges Congress to provide $25 billion bailout for U.S. airlines
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[October 07, 2020]
By David Shepardson and Tracy Rucinski
WASHINGTON/CHICAGO (Reuters) - U.S. President Donald Trump said late on
Tuesday Congress should quickly extend $25 billion in new payroll
assistance to U.S. passenger airlines furloughing thousands of workers
as air travel remains down sharply amid the coronavirus pandemic.
Trump's new demand came hours after he announced his administration
would abandon talks with congressional Democrats over proposals to spend
at least $1.6 trillion in additional coronavirus relief funds, a move
that appeared to scuttle a new $25 billion bailout for U.S. passenger
airlines to keep tens of thousands of workers on the job for another six
months.
But Trump later issued a call on Twitter, urging Congress to
"IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support....
I will sign now!" he wrote, saying Congress could tap unused funds from
prior coronavirus relief to fund airlines and a separate program for
small business.
American Airlines <AAL.O> and United Airlines <UAL.O> last week began
laying off 32,000 workers, but had said they would reverse course if
lawmakers reach a deal on a new government program to fund payroll
costs.
A prior $25 billion airline payroll support program of mostly cash
grants approved by Congress in March expired on Sept. 30.
House Speaker Nancy Pelosi last Friday expressed support for a
standalone bill to keep airline workers on the job if a broader package
could not be reached.
A Pelosi spokesman did not respond to a request for comment late
Tuesday.
Congress is expected to return to session on Oct. 19 and lawmakers may
make a new attempt to pass a standalone measure to provide the $25
billion sought by airlines but the prospects are uncertain, even though
the airline relief enjoys strong support in both the House and Senate.
One remaining issue is how Congress would pay for the new funding, a
senior congressional aide told Reuters Tuesday.American Airlines closed
about 4.5% lower after Trump's tweet on ending talks, while shares of
United Airlines <UAL.O> closed 3.6% lower. Southwest Airlines <LUV.N>
stock fell 2.4% and Delta Air Lines <DAL.N> shares closed 2.9% lower.
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American Airlines 737 max passenger planes are parked on the tarmac
at Tulsa International Airport in Tulsa, Oklahoma, U.S. March 23,
2020. REUTERS/Nick Oxford/
Airlines for America, the trade group representing major U.S. airlines, noted
"thousands of airline workers across the country have already lost their jobs –
and more furloughs are expected in the coming weeks." But the group added "there
is a glimmer of hope that our leaders in Washington will act and save these jobs
before it’s too late."
The U.S. Travel Association said "with millions of Americans suffering, it is
woefully shortsighted to end relief negotiations" and added that "without
immediate aid, 50% of all travel-supported jobs will be lost by December — an
additional loss of 1.3 million jobs."
U.S. airlines are collectively burning about $5 billion of cash a month as
passenger traffic has stalled at around 30% of 2019 levels. After tapping
capital markets, they say they have enough liquidity to last them at least 12
months at that rate.
Between voluntary and involuntary furloughs, major U.S. airlines' workforce will
shrink by at least 25% in October.
Industry experts expect a slight improvement in domestic demand over the winter
holidays from current levels, but it will remain far below last year's volumes.
Meanwhile, higher-margin business and international travel remain severely
depressed.
Chief executives acknowledge that pre-pandemic air travel demand is unlikely to
return for years, and still unknown is how the pandemic, which has forced
drastic changes in habits, will impact travel behavior.
American Airlines will end service to 11 smaller airports on Wednesday after
Congress failed to approve additional aid.
(Reporting by David Shepardson in Washington and Tracy Rucinski in Chicago;
Editing by Matthew Lewis and Kenneth Maxwell)
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