U.S. President Donald Trump has called on Congress to extend $25 billion in new payroll assistance to U.S. airlines
The call for aid comes as U.S. airlines furlough thousands of workers as air travel remains down sharply amid the COVID-19 pandemic.
And, 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. carriers and sent stock markets sharply lower.
But later on Twitter, Trump urged Congress to “IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support.... I will sign now!”
American Airlines (NASDAQ:AAL) and United Airlines (NASDAQ:UAL) 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 previous $25-billion airline payroll support program of mostly cash grants approved by Congress in March expired on September 30.
Congress is expected to return to session on October 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 of Representatives and Senate.
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 the current cash burn rate. Between voluntary and involuntary furloughs, major U.S. airlines’ workforce will shrink by at least 25% in October.
