Risk & Compliance

GOP Senators Offer 6-Month Lifeline for Airlines

A new $28 billion relief package would avert layoffs of airline employees as the industry continues to struggle with the COVID pandemic.
Matthew HellerSeptember 22, 2020

Two Republican senators have introduced legislation to provide $28 billion in coronavirus relief to U.S. airlines, extending a program that is set to expire at the end of this month.

Airlines have warned that tens of thousands of employees would be laid off next week unless the Payroll Support Program (PSP), a component of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March, was extended.

With Congress deadlocked over a new, national coronavirus relief bill, Senate Commerce Committee Chairman Roger Wicker, Republican from Mississippi, and Sen. Susan Collins, a Republican from Maine, stepped in on Monday, introducing the Air Carrier Worker Support Extension Act of 2020.

The measure would extend the PSP through March 2021 with $28 billion in funding. The bill includes both new appropriations and unspent CARES Act money.

“The CARES Act successfully saved thousands of jobs that support the airline industry and provided these businesses with some breathing space after the drastic drop in air travel caused by the COVID-19 pandemic,” Wicker said in a news release.

“However, the market has not turned around as much as we had hoped, and additional relief is needed to prevent more than 60,000 aviation sector employees from losing their jobs beginning October 1,” he added.

The PSP provided $32 billion for passenger airlines, cargo carriers, and contractors on the condition that a set level of air service was maintained during the COVID-19 pandemic and that neither jobs nor pay rates were cut through Sept. 30.

But as CNBC reports, “Airlines have struggled throughout the coronavirus pandemic, racking up billions in losses, while a significant rebound in travel demand has yet to materialize.”

U.S. airlines carried 73% fewer scheduled service passengers in July 2020 than in July 2019, according to preliminary government data.

President Donald Trump has indicated he supports more government aid to avert airline layoffs, and industry executives have warned that layoffs would threaten the country’s economic recovery.

But the National Air Transportation Association said the path forward for the Wicker-Collins bill “remains unclear and faces a challenging political landscape as this session of Congress quickly comes to a close.”

(Photo by Caroline Brehman/CQ-Roll Call, Inc via Getty Images)

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