MIAMI – US airlines have taken to capitol hill to advocate for an extension to the airline relief funding as the industry has not seen the rate of recovery than was originally predicted.
Almost half a year ago, when it became clear that the COVID-19 pandemic was going to seriously impact travel demand for the aviation industry, the US Congress provided $50bn in financial aid to airlines through the CARES act.
The fund was intended to cover payroll expenses at the airlines to avoid the thousands of imminent job cuts through September 30. Alas, that date is rapidly approaching.
Critical Links in Danger
If additional funding to the airlines is not received, carriers will have no choice but to cut service to smaller cities, warns United Airlines (UA) CEO Scott Kirby. “We’re trying to maintain those critical links to communities but, much like our employees, at some point, you can’t keep everything going,” he mentioned to reporters.
American Airlines (AA) CEO Doug Parker chimed in, saying that “If Congress can’t come together on a mechanism to extend the [payroll support program] by Oct. 1 — eight days from today — small communities will lose air service and 19,000 American Airlines aviation professionals will be furloughed.”
Kirby and Parker were joined in DC by jetBlue (B6) CEO Robin Hayes, as well as leaders from the Airline Pilots Association (ALPA), the Association of Flight Attendants-CWA (AFA), the Airlines for America (A4A) trade group, and other major labor unions within the aviation industry.
Possible Aid Extension
The pleas of the airline executives may be working, as on September 21 a bill for a further $28bn in airline aid money was introduced by senators Roger Wicker (R-Miss.) and Susan Collins (R-Maine).
With Wicker as the chairman of the commerce committee overseeing aviation, and Collins leading the subcommittee for transportation funding, this bill would see airline workers jobs protected through March 31, ensuring that the critical air service to smaller communities can continue.
Speaking to the press, Wicker said “The CARES Act successfully saved thousands of jobs that support the airline industry and provided these businesses with some breathing space after the drastic drop in air travel caused by the COVID-19 pandemic… However, the market has not turned around as much as we had hoped, and additional relief is needed.”
Additional Aid Facing Criticism
Even though the need for further assistance has received bipartisan support, and the new proposed $28bn bill appears to be the airlines’ best shot as additional funding, some do not agree that the support should be for airlines alone.
The airlines see an extension in aid money as a means to buy more time to assess how the pandemic will continue to affect the industry, in order to best avoid furloughs. However, those on Wall Street disagree and think an extension would just be delaying the inevitable downsizing airlines will have to face without a rapid recovery, the likelihood of which seems slimmer by the day.
At this point, it appears to simply be a waiting game. What is clear though, is that without an extension in relief money, small communities with already limited air service will suffer.
Featured image: American Airlines Boeing 777-300ER. Photo: Luca Flores