CHICAGO/WASHINGTON (Reuters) – Hopes for another $25 billion in airline aid before midnight Wednesday – the deadline for mass furloughs of airline employees – dimmed after Washington leaders said there was still more work to do on a broad coronavirus relief package.
Senate Majority Leader Mitch McConnell said Republicans and Democrats were still very far apart on how much to spend and called House of Representatives Speaker Nancy Pelosi’s $2.2 trillion proposal “outlandish.”
The deadlock seemed to close the door on a deal before airline furloughs set to start on Thursday, unless airlines decide to postpone them.
Earlier, U.S. Treasury Secretary Steven Mnuchin urged U.S. airlines to delay the furloughs if a bipartisan deal on a broad coronavirus relief package was in sight, something American Airlines Chief Executive Doug Parker said he would consider if there was a “clear and concrete path” on a bill.
If not, 19,000 American Airlines workers will be furloughed on Thursday, and at least another 12,000 at United Airlines.
U.S. airlines have been pleading for another $25 billion in payroll support to protect jobs for another six months once the current package, which banned furloughs, expires at midnight.
Nick Calio, who heads the airline trade group Airlines for America, said the industry was still pursuing all potential avenues for new assistance as time runs short.
“People keep talking, but we need results,” Calio told Reuters. “We are hopeful but not confident about them reaching a deal on a larger bill.”
Mnuchin told CNBC he planned to talk to chief executives of airlines later on Wednesday.
U.S. airline shares gave up earlier gains in late afternoon trading. [.DJUSAR]
Weeks of intense airline lobbying has won over many but not all Washington lawmakers, while also drawing attention to the plight of other pandemic-hit industries as the crisis persists.
U.S. airline officials said earlier this week there were no plans in place to halt the furloughs without aid by Oct. 1, and it was unclear what would happen if a deal passes afterwards.
Thousands of employees have already been instructed to return their badges.
Airlines, which were awarded a separate $25 billion in federal loans under a first coronavirus relief bill in March and have also tapped capital markets to shore up liquidity, are operating about half their 2019 flying schedules and suffering a 68% decline in passenger volumes. [L1N2GR014]
The impact of the coronavirus on travel may cost as many as 46 million jobs globally, according to projections published on Wednesday by Air Transport Action Group (ATAG).
Airlines have argued they need trained employees to help drive an economic recovery as the crisis subsides. American Airlines’ Parker told CNN he believed one more round of aid would be sufficient.
American Airlines flight attendant Allie Malis was among workers at risk of furlough who planned to keep pressing lawmakers on Wednesday.
“I’ve poured every ounce of my energy into passing this extension,” she said. “I don’t have a Plan B.”
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