MIAMI – As the CARES Act funding support is about to expire, the White House is considering executive actions to help airlines survive the continuing COVID-19 crisis.
The declaration came earlier this week from President Trump’s Chief of Staff, Mark Meadows. In an interview, Meadows said that the Executive was planning to take a few other measures if Congress was not going to work to reach a deal. POTUS, he said, would “work and solve some problems.”
With these actions, the Executive expects to keep some airline employees from being furloughed, according to Meadows. The priority is to keep people in jobs during the “V-shaped recovery.” So far, the Trump administration has taken four executive measures in relation to the aviation sector.
To sum up the measures, the Payroll Support System was structured as a pass-through: money would be allocated in a bundle consisting mainly of grants and a smaller portion of loans to airlines and their contractors. The businesses would then transfer the money to the workers by keeping them on and paying their salaries.
For this reason, those companies that took the money would be barred from laying off workers, regardless of their operation performance or lack thereof.
Current Situation on Airline Furloughs
Despite the fact that the CARES Act injected more than US$50bn in loans and grants for airlines, companies have nevertheless had to axe jobs. As such, the cuts will be effective on October 1 once the government support expires.
For example, just this week, American Airlines (AA) announced that it would layoff 19,000 employees. A few days before, it had cut service to 15 markets. On same day, Delta Air Lines (DL) said that it would furlough almost 2,000 pilots. Both actions were said to be consequence of the pandemic.
Furthermore, the crisis has already taken its first victim from the US airline industry. ExpressJet (EV) announced that it would cease its operations by the end of September.
The pandemic continues, and its negative impact means any outlook remains uncertain. The industry, therefore, would need more support from governments than it forecasted if it does not want to continue making tough decisions to survive the crisis.
Featured photo: President Donald J. Trump arrives at Joint Base Andrews Air Force Base Friday, March 22, 2019, in Maryland, en route Florida. Official White House Photo by Shealah Craighead.