Trump urges
Congress to provide $25 billion bailout for U.S. airlines
WASHINGTON/CHICAGO
(Reuters) - U.S. President Donald Trump said late on Tuesday Congress
should quickly extend $25 billion in new payroll assistance to U.S.
passenger airlines furloughing thousands of workers as air travel remains
down sharply amid the coronavirus pandemic.
Trump’s new demand
came hours after he announced his administration would abandon talks with
congressional Democrats over proposals to spend at least $1.6 trillion in
additional coronavirus relief funds, a move that appeared to scuttle a new
$25 billion bailout for U.S. passenger airlines to keep tens of thousands
of workers on the job for another six months.
But Trump later
issued a call on Twitter, urging Congress to “IMMEDIATELY Approve 25
Billion Dollars for Airline Payroll Support.... I will sign now!” he wrote,
saying Congress could tap unused funds from prior coronavirus relief to
fund airlines and a separate program for small business.
American Airlines
AAL.O and United Airlines UAL.O last week began laying off 32,000 workers,
but had said they would reverse course if lawmakers reach a deal on a new
government program to fund payroll costs.
A prior $25
billion airline payroll support program of mostly cash grants approved by
Congress in March expired on Sept. 30.
House Speaker
Nancy Pelosi last Friday expressed support for a standalone bill to keep
airline workers on the job if a broader package could not be reached.
A Pelosi spokesman
did not respond to a request for comment late Tuesday.
Congress is
expected to return to session on Oct. 19 and lawmakers may make a new
attempt to pass a standalone measure to provide the $25 billion sought by
airlines but the prospects are uncertain, even though the airline relief
enjoys strong support in both the House and Senate.
One remaining
issue is how Congress would pay for the new funding, a senior congressional
aide told Reuters Tuesday.American Airlines closed about 4.5% lower after
Trump's tweet on ending talks, while shares of United Airlines UAL.O closed
3.6% lower. Southwest Airlines LUV.N stock fell 2.4% and Delta Air Lines
DAL.N shares closed 2.9% lower.
Airlines for
America, the trade group representing major U.S. airlines, noted “thousands
of airline workers across the country have already lost their jobs – and
more furloughs are expected in the coming weeks.” But the group added
“there is a glimmer of hope that our leaders in Washington will act and
save these jobs before it’s too late.”
The U.S. Travel
Association said “with millions of Americans suffering, it is woefully
shortsighted to end relief negotiations” and added that “without immediate
aid, 50% of all travel-supported jobs will be lost by December — an
additional loss of 1.3 million jobs.”
U.S. airlines are
collectively burning about $5 billion of cash a month as passenger traffic
has stalled at around 30% of 2019 levels. After tapping capital markets,
they say they have enough liquidity to last them at least 12 months at that
rate.
Between voluntary
and involuntary furloughs, major U.S. airlines’ workforce will shrink by at
least 25% in October.
Industry experts
expect a slight improvement in domestic demand over the winter holidays
from current levels, but it will remain far below last year’s volumes.
Meanwhile, higher-margin business and international travel remain severely
depressed.
Chief executives
acknowledge that pre-pandemic air travel demand is unlikely to return for
years, and still unknown is how the pandemic, which has forced drastic
changes in habits, will impact travel behavior.
American Airlines
will end service to 11 smaller airports on Wednesday after Congress failed
to approve additional aid.
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