The Southwest Airlines gates of National Airport are almost completely without flying customers, showing the impact COVID-19 is having on air travel.
The Trump administration indicated Tuesday that it would support separate funding measures to provide more financial relief for airlines, a move that could stave off layoffs of thousands of workers and drastic cuts to flight schedules.
With talks for an overall additional stimulus deal stalled, Press Secretary Kayleigh McEnany encouraged House Speaker Nancy Pelosi, D-Calif., to send separate funding bills, including one for airlines.
“At this point, the onus is really on Speaker Pelosi,” McEnany said at the daily media briefing. “We encourage her to send one-off bills, perhaps airline funding or other elements that we could work through the process to get to the American people.”
Despite many empty seats, airlines have kept flying with help from a $50 billion allotment that was part of the Coronavirus Aid, Relief, and Economic Security Act that passed in March.
That money is about to run out.
“If we don’t get the (new) stimulus done, this industry has a hard cliff of Oct. 1. We’re talking the range of 100,000 people who could be in the unemployment lines as early as next week,” Nicholas Calio, CEO of the trade group Airlines for America warned in an interview Tuesday with USA TODAY.
Airlines are in “dire shape” and collectively losing $5 billion a month. They have already cut executive pay, parked a third of their aircraft fleets and undertaken voluntary measures to reduce payroll, including voluntary leave and early retirement, Calio said.
“With all that, we still are not producing the kind of revenue we need to support the number of employees we have,” Calio said.
The result will not only be rampant layoffs, but cuts that could reduce the number of routes and flights to many airports and stop service altogether in others, he said.
While he said he can’t guarantee another round won’t be requested in six months, Calio said the upside of keeping workers employed outweighs the downside of having them laid off.
Two Republican senators, Roger Wicker of Mississippi and Susan Collins of Maine, offered a $28 billion package to the airline industry in a measure announced Monday, the Air Carrier Worker Support Extension Act. Without Pelosi’s support on the House side, however, its fate is uncertain.
While employee unions are supportive, one economist issued a statement saying she doesn’t think another relief package is a sound idea.
Airlines should look to private markets, not the government, said Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University. “Failing that, they should do what they’ve done in the past when in such a predicament: declare bankruptcy,” she said in the statement issued through a university spokesman.
She also came out against stimulus funding for the industry last March.
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