US Treasury says loan deal reached with seven airlines amid crisis

Marco Green
October 1, 2020

Airlines and unions were still heavily lobbying Congress ahead of a Wednesday deadline for a new US$25 billion (S$34.2 billion) bailout to keep workers on the payroll for another six months, but industry officials acknowledge they face an uphill battle with just hours left.

U.S. carriers that received billions in aid from Congress had promised to refrain from laying off workers until the end of September, setting the stage for potentially thousands of job cuts in October.

Airlines for America, an industry group, called for an extension of the Payroll Support Program, which was part of the CARES Act and provided the original funding to airlines. The deal was aimed at helping the airlines cope with shutdowns, quarantines, and a crash in bookings, but at the time it was passed, lawmakers believed demand for air travel would recover in a few months. The current payroll support package is set to expire at midnight.

American Airlines Group Inc Chief Executive Doug Parker told CNN that if there was a "clear and concrete path" then "of course" he would delay Thursday's furloughs. "We implore our elected leaders to reach a compromise, get a deal done now, and save jobs", United said in a message to staff. Parker said he was "really encouraged" by the ongoing talks.

USA airline officials said earlier this week there were no plans in place to halt the furloughs without aid by October 1, and it was unclear what would happen if a deal passes afterwards.

Beyond American and United, the other airlines that signed loan agreements with the administration of President Donald Trump are Alaska Airlines, Frontier Airlines, JetBlue, Hawaiian Airlines and SkyWest Airlines.

House Democrats passed a new stimulus package in May, which provided billions more in aid to the airline industry, but Republicans in the White House and Speaker Nancy Pelosi were unable to come to an agreement on the legislation.

However, talks for a broad coronavirus package that would include another round of airline aid faltered on Wednesday, opening the door to more than 30,000 job cuts, starting Thursday, the lion's share of them at American and United.

Airlines have tried to cut labor costs by implementing measures like reducing employee work schedules, offering early retirement deals, or granting temporary leaves.

Other reports by Click Lancashire

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