US lawmakers back US$15b in airline payroll assistance

US airlines furloughed more than 32,000 workers in October, after a six-month US$25 billion bailout measure expired on September 30. American Airlines alone furloughed 19,000 employees, while United Airlines furloughed more than 13,000. — Reuters pic
US airlines furloughed more than 32,000 workers in October, after a six-month US$25 billion bailout measure expired on September 30. American Airlines alone furloughed 19,000 employees, while United Airlines furloughed more than 13,000. — Reuters pic

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WASHINGTON, Dec 21 — A bipartisan legislative deal unveiled by US lawmakers on Sunday will grant US airlines US$15 billion (RM60.6 billion) in new payroll assistance that will allow them to return more than 32,000 furloughed workers to payrolls through March 31, sources briefed on the matter told Reuters.

The support is part of US$45 billion earmarked for the transportation sector in a US$900 billion package for Covid-19 relief.

Amtrak, the nation’s largest passenger railroad firm, is due to receive US$1 billion while US$14 billion will go to public transit systems and US$10 billion to state highways, a senior Democratic aide said.

The legislation is also expected to include significant changes to how the Federal Aviation Administration certifies new airplanes following two Boeing 737 MAX crashes in Indonesia and Ethiopia that killed 346 people, three congressional aides said, but specific details were not immediately available.

The sources declined to be identified as the package’s details have yet to be formally unveiled.

The aviation assistance comes after five months of furious lobbying — first by aviation unions and later by airline executives — who argued the industry desperately needed new government help as travel demand remains devastated by the Covid-19 pandemic.

US transit systems have also warned that without new government aid they could be forced to make draconian cuts in service and employment.

US airlines furloughed more than 32,000 workers in October, after a six-month US$25 billion bailout measure expired on September 30. American Airlines alone furloughed 19,000 employees, while United Airlines furloughed more than 13,000.

The US Transportation Department said US passenger airlines had 368,000 full-time workers as of October 15.

Airline workers will be paid retroactive to December 1 and airlines will have to resume flying some routes they stopped after the aid package expired, congressional aides briefed on the talks said. Airline workers cannot be furloughed through March 31 as a condition of the assistance.

Airlines should receive funds about 10 days after the bill is signed, sources said.

The new assistance programme is expected to mirror the US$25 billion programme approved by Congress in March, which required larger airlines to repay 30 per cent of the payroll grants over time and offer the government warrants. It is also expected to include minimum flight requirements.

US carriers are losing US$180 million in cash daily, with passenger volumes down nearly 70 per cent from year earlier levels while cancellations are rising, according to industry lobby Airlines for America.

Congress in March approved a separate US$25 billion in low-cost government loans for airlines and suspended some aviation excise taxes through December 31.

The new US$45 billion transportation package is also set to include US$1.75 billion for airports and US$200 million for airport concessionaires, US$1 billion for airport contractors and US$2 billion for the private motorcoach, school bus and ferry industries, officials said. — Reuters

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