Trump Proposed $25 Billion Rescue Package For U.S. Airlines
On late Tuesday, October 6, 2020, United States (U.S.) President Donald Trump urged Congress to allot $25 billion bailout assistance for the ailing American passenger airlines. The ongoing COVID-19 pandemic has hit hard on the global airline industry due to the sudden travel restrictions imposed by governments across the globe. As a result of the adverse impact of the pandemic, the top U.S. airlines including American Airlines and United Airlines recently announced last week that they have begun furloughing of 32,000 employees in a combine.
A prior U.S. government’s payroll support program of $25 billion for the airline, which was approved by Congress in March, has expired on September 30 and the U.S. airline companies are asking for additional bailout support.
At present, Congress is facing a tussle since the Trump administration has been ignoring to begin a bipartisan agreement regarding the proposal of a $1.6 trillion additional rescue budget made by congressional democrats. Earlier, the two top U.S. airlines had said that if they would reserve their decision for layoffs once the lawmakers reach a deal on new payroll.
Trump’s Urgent $25 Billion Rescue Package
Trump wrote on Twitter, by urging Congress to “IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support… I will sign now!” He added that Congress could also allot the unused funds from prior coronavirus relief to fund airlines and a separate program for small businesses. The urgent call of Trump’s $25 billion rescue package for U.S. passenger airlines was aimed at protecting tens of thousands of employees on the job for another six months.
The lawmakers including both the members of the House of Representative and Senate had shown interests in bailout the ailing U.S. airline companies but the problem emerged on the issue of how Congress would pay for the new funding, a senior congressional assistant told Reuters Tuesday. Last Friday, House Speaker Nancy Pelosi extended support for protecting of airline workers and their jobs through a broader rescue package.
Congress would resume sessions on October 19 and discuss Trump’s additional package for airline payroll. Following the uncertainty of a deal, the major U.S. airlines including Southwest Airlines and Delta Air Lines shrunk their shares and closed lower yesterday.
Existing Challenges of U.S. Airlines
Trade group representing major U.S. airlines, Airlines for America noted, “Thousands of airline workers across the country have already lost their jobs – and more furloughs are expected in the coming weeks.” The group hoped for Washington’s urgent actions to save the companies before it was too late. Similarly, the U.S. Travel Association said, “without immediate aid, 50% of all travel-supported jobs will be lost by December — an additional loss of 1.3 million jobs.”
As per a Reuters’ report, U.S. airlines are collectively burning about $5 billion of cash per month due to the dipping of nearly 30% passenger travel compared to 2019 impacted by the widespread coronavirus pandemic. Considering the adverse impact of the pandemic, airline executives were worried that the virus outbreak had brought changes in passengers’ behaviors, which would have negative effects on traveling.
Meanwhile, industry experts suggested a slight improvement in domestic demand as the winter holidays approached nearer but stood their negative view about international travel. As the rescue deal faded away, American Airlines announced that it would end service to 11 smaller airports from today.