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Clock Ticking for Federal Airline Aid as Bipartisan Support Grows

Madhu Unnikrishnan

September 23rd, 2020

House Transportation and Infrastructure Committee Chairman Peter DeFazio (D-Ore.) and ranking member Sam Graves (R-Mo.) lent their support to more payroll support for airline employees, just one day after Senators Susan Collins (R-Maine) and Roger Wicker (R-Miss.) introduced a $28 billion bill for more aid to the industry.

The two House lawmakers are asking Congress to include airline payroll support in any new coronavirus-relief legislation. The White House is in favor of a standalone bill to support airlines. House Speaker Nancy Pelosi (D-Calif.) has not indicated which way her caucus is leaning, but reportedly has been in talks with industry leaders and unions on the need for more aid.

The Association of Flight Attendants (AFA) has called on its members to lobby congress for the next seven days, until current federal aid through the CARES Act expires. “Our leaders need to get something meaningful done — and it needs to get done now,” AFA said.

United CEO Scott Kirby has said the carrier could lay off up to 16,000 employees on Oct. 1, when aid expires. But he said at the Skift Global Forum on Sept. 22 the carrier expects to be about half the size it was in 2019 through the end of next year, when he expects a vaccine to be widely distributed. Delta CEO Ed Bastian, speaking at the same event, said he is in favor of a “clean” extension of the payroll support program, but added that Delta will be a smaller airline for the foreseeable future, until demand returns.

Southwest said that demand is 70% lower than it was last year, and the airline expects to be smaller through this year. The airline does not plan any furloughs this year, and it plans to continue flying to all the destinations it served before the pandemic, although it may reduce the number of flights it operates, a spokesman told Airline Weekly.

Furloughing tens of thousands of people will cause immense pain for those who lose their jobs and could have a ripple effect throughout the economy. Moreover, as Kirby said, many airline employees are licensed. Furloughing them now will hamper airlines’ ability to spring back quickly when demand returns.

But the chorus of voices questioning the need for more federal aid is growing louder. Within hours of the press event yesterday, airline industry observers took to Twitter to ask why airlines need more federal aid if the industry expects to be smaller. Doesn’t more aid just forestall the inevitable downsizing to come?

Kirby, at the Skift Global Forum, said aid buys airlines more time. By April, the world should know how vaccine development and distribution are progressing.

DeFazio’s and Graves’ support for more aid gives the movement more credibility, but with just a handful of days before a Congressional recess, an upcoming presidential election, and the Senate preoccupied with a Supreme Court vacancy, it remains unclear if any legislation will pass before the Oct. 1 deadline.

Madhu Unnikrishnan

September 23rd, 2020

Photo credit:  United Airlines

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