US airlines urged to delay layoffs, relief deal might be in sight

11 months ago 45
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United States Treasury Secretary Steven Mnuchin has urged US airlines to delay tens of thousands of furloughs set to begin on Thursday if a bipartisan deal on a broad coronavirus relief package was in sight.

US airlines have been pleading for a second $25bn bailout that would protect jobs for another six months. The current payroll support package is set to expire at midnight.

Mnuchin was set to meet with House of Representatives Speaker Nancy Pelosi on Wednesday afternoon to discuss the prospects for another broad package.

Nick Calio, who heads the trade group Airlines for America, said the industry was still pursuing all potential avenues for new assistance as the clock ticks.

“People keep talking, but we need results,” Calio told Reuters news agency. “We are hopeful but not confident about them reaching a deal on a larger bill.”

Mnuchin told CNBC he planned to talk to chief executives of airlines later on Wednesday, and US airline shares jumped on the news.

American Airlines Group Inc Chief Executive Doug Parker told CNN that if there was a “clear and concrete path” then “of course” he would delay Thursday’s furloughs. Parker said he was “really encouraged” by the ongoing talks.

Airline workers have been aggressively lobbying legislators to reach a deal.

Pelosi has said she hopes to have a coronavirus aid deal with the White House this week, but prospects of a comprehensive bill passing before Thursday were dim, industry officials said. A stand-alone bill for airlines would face the challenge of obtaining unanimous support in the Senate under rules governing legislation with such a short time remaining to consider it.

Mnuchin said he did not think a stand-alone measure to avert airline layoffs was likely.

Weeks of intense airline lobbying has won over many – but not all – Washington lawmakers, while also drawing attention to the plight of other pandemic-hit industries as the crisis persists.

US airline officials said earlier this week there were no plans in place to halt the furloughs without aid by October 1, and it was unclear what would happen if a deal passes afterwards.

Thousands of employees have already been instructed to return their badges.

Airlines, which were awarded a separate $25bn in federal loans under a first coronavirus relief bill in March and have also tapped capital markets to shore up liquidity, are operating about half their 2019 flying schedules and suffering a 68 percent decline in passenger volumes.

The impact of the coronavirus on travel may cost as many as 46 million jobs globally, according to projections published on Wednesday by the Air Transport Action Group (ATAG).

Airlines have argued they need trained employees to help drive an economic recovery as the crisis subsides. Parker told CNN he believed one more round of aid would be sufficient.

Allie Malis, who is among 19,000 on American Airlines’ furlough list, said she would keep pressing legislators on Wednesday.

“I’ve poured every ounce of my energy into passing this extension,” she said. “I don’t have a plan B.”

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