Hope Grows for More Airline Payroll Grants After Support From GOP Senators, Trump
Airline employee unions believe they are closer to another $25 billion in federal grants to cover to payrolls through March after getting support from a group of Republican Senators and President Donald Trump.
A group of 16 Republicans in the U.S. Senate penned a note to Senate leaders on Wednesday staking their support for another $25 billion in grants. On Wednesday night, President Trump indicated he was in support of helping airlines.
“It’s important to keep our airlines going,” Trump said during a White House press briefing. “We don’t want to lose our airlines.”
Airlines are facing historic declines in passenger traffic and executives have indicated that thousands of furloughs are coming in the fall when the first round of payroll grants expire. With the July surge in COVID-19 cases slowing down the airline recovery, another $25 billion in grants is now the best hope to avoid more painful cuts.
A stimulus package including the $25 billion has already passed the U.S. House and awaits Senate action. Senate Majority Leader Mitch McConnell has proposed legal protections for businesses regarding COVID-19 along with a bill that includes extensions in unemployment benefits and another round of stimulus checks directly to Americans.
Sen. John Cornyn of Texas, who is running for reelection, signed onto the letter backing an additional round of airline grants. Sen. Ted Cruz has not indicated his support, but unions said they have reached out to Cruz on the deal.
Airline executives including American Airlines CEO Doug Parker and Southwest Airlines CEO Gary Kelly have spent time with lawmakers in Washington in the last week to build support for the grants.
Airlines have been furiously cutting payrolls for the fall through voluntary leave and early retirements. Fort Worth-based American Airlines sent out more than 28,000 furlough notices to employees. United Airlines sent out 36,000 notices.
Southwest Airlines said it won’t send out furlough notices this year after nearly 28% of employees agreed to take time off or retire early. But Southwest has continued to warn employees that it still needs airline traffic to double to avoid future furloughs.
The U.S. airline industry employs about 750,000 people, according to federal statistics. To start the year, American Airlines had more than 30,000 employees in North Texas and there were another 10,000 at Dallas-based Southwest Airlines.
Cuts have already started to come. American Airlines trimmed its administrative and support staff by more than 5,000 employees, although those employees are getting paid through the end of September.
Still, after the most profitable few years in airline history, the biggest four carriers lost a combined $10.3 billion in the second quarter alone and are continuing to lose money on a daily basis.
That $10.3 billion loss came despite billions given to airlines. Those $32 billion in grants have paid for about three-quarters of employee costs at airlines since April.
American Airlines received $4.1 billion in grants and another $6.45 billion in loans. Southwest took $2.3 billion in grants and $945 million in loans.
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