Does Congress Have the Will for More Airline Aid?
- Two Republican senators introduced a bill to extend the payroll support program for airline employees through March of next year, but whether the legislation will even be debated in times remains an open question. Meanwhile, support for more airline aid is growing in the House of Representatives, as Transportation & Infrastructure Committee Chairman Peter DeFazio (D-Ore.) and ranking member Sam Graves (R-Mo.) have urged Congress to extend payroll support.
House Speaker Nancy Pelosi (D-Calif.) has reversed course and is said to be working on a new coronavirus fiscal aid package that has some aid for airlines, and talks with Treasury Secretary Steven Mnuchin are expected to resume soon. Details on any airline aid were not available at press time.
Sen. Roger Wicker (R-Miss.), chairman of the Science, Commerce, and Transportation Committee, and Sen. Susan Collins (R-Maine), chairman of the Transportation Appropriations Subcommittee, introduced a bill Sept. 21 that extends $28b in payroll support for passenger airlines and $300m for cargo carriers. An additional $3b would be made available for contractors supplying the airline industry.
The bill would tap $17.4b in existing and unused appropriations through the CARES Act, passed earlier this year, which provided $25b in payroll support through Sept. 30, with the remaining $11b coming from new appropriations. In exchange, airlines must pledge not to furlough employees through March of next year, and the Treasury Department can extract stock warrants. Airlines taking the funds also must promise not to repurchase shares or pay dividends through March 2022.
The bill comes at a crucial time for airlines. When the CARES Act’s payroll support program expires at the end of this month, tens of thousands of employees could be let go. “The payroll support program that was included in the CARES Act saved over 700k…jobs,” Collins said in a statement to Airline Weekly. “Our legislation to extend this lifeline would help frontline employees to continue to receive a paycheck and require airlines to maintain flights to every community they serve.”
Airlines have warned that they will be much smaller and will therefore need fewer employees to match demand. “The market has not turned around as much as we had hoped, and additional relief is needed to prevent more than 60k aviation sector employees from losing their jobs beginning October 1,” Wicker said.
Airline labor groups have stressed the urgency of the extension, and airline CEOs have urged a “clean extension” of the payroll support program to prevent massive layoffs. “We appreciate that Senate Commerce Committee Chairman Roger Wicker and Senate Transportation Appropriations Subcommittee Chairman Susan Collins recognize that time is running out for airline workers and have introduced a free-standing extension of the PSP to prevent massive layoffs and disruptions to the U.S. airline industry,” the Air Line Pilots Association (ALPA) said. “ALPA implores Congress to move legislation to extend the [payroll support program] by any means possible before October 1.”
And that’s the rub. Congress has remained deadlocked for months on further fiscal aid for the coronavirus pandemic. The House of Representatives in May passed the $3t HEROES Act, which has not been debated in the Senate. The upper house considered a $500b bill earlier this month — which did not include any further aid for airlines — that fizzled. The White House has at times stressed the importance of more aid, and at times has signaled it does not see the need. Meanwhile, the Federal Reserve Bank has changed monetary policy to aid the economy, but Chairman Jerome Powell has called for more fiscal aid from Congress.
And against this backdrop, a presidential election looms, as does a Congressional recess. To complicate things further, Supreme Court Justice Ruth Bader Ginsburg died on Sept. 18, and Senate Republicans have pledged to fill the seat — and much of their time — before the Nov. 3 election.
- Two airlines are delaying pilot furloughs for a month to give them more time to see if payroll support is extended. Both United and Delta said they would furlough thousands of pilots on Oct. 1, when CARES Act funding expires. But the two airlines have reached deals with union leadership to delay the furloughs. United and its pilots union leadership have agreed to delay furloughs until Oct. 30. Pilots are voting on the deal. Delta and its union have agreed to a delay until Nov. 1.
- EasyJet and its pilot union reached a deal that avoids furloughs and layoffs and that offers jobs to pilots at closed bases new positions in the airline’s rosters, BALPA said. The carrier earlier this year said it would need to furlough or lay off more than 700 pilots. In order to avoid layoffs, the easyJet and BALPA worked out voluntary deals. About 60 pilots have opted to leave the company voluntarily, and 1,500 have reduced hours to part-time.