Extension of Airline Payroll Aid Sought by Unions, Lawmakers

(Bloomberg) -- A bipartisan group of House lawmakers along with airline unions are calling for an extension of federal aid to prevent an expected wave of layoffs starting in October.

The airline industry, facing steep declines in passengers as a result of the Covid-19 pandemic, has begun alerting employees to expect job cuts numbering in the tens of thousands.

A federal aid program alloted $32 billion for passenger and cargo airlines as well as industry contractors to cover payrolls through Sept. 30. Seven lawmakers led by Representative Peter DeFazio, the Oregon Democrat who is chairman of the House Transportation Committee, wrote to colleagues this week seeking an extension of the protections for another six months.

They urged other members to join in urging House and Senate leaders to extend the Payroll Support Program saying it had “saved hundreds of thousands of aviation jobs—and not a penny went to enrich the airlines themselves or their shareholders.”

The call was echoed Wednesday by 13 aviation unions including pilots, flight attendants, mechanics and others, who wrote a letter to members of Congress, saying, “This is the simplest and fastest way to maintain Congress’ historic commitment to keep aviation workers on payroll.”

Congress is working on additional aid packages as the coronavirus outbreak continues. It’s not clear whether the Republican-controlled Senate would join such an effort to extend payroll protections for airlines.

Passenger counts have come back significantly from their lowest point in April, when demand dropped by more than 95%. However, the recovery has stalled in recent weeks at about 26% of the equivalent passengers from 2019, according to Transportation Security Administration data.

The airline industry is bracing for possibly tens of thousands of layoffs once restrictions tied to the original federal loans expire on Sept. 30.

United Airlines Holdings Inc. notified about 45% of its U.S. workforce earlier this month that their jobs are at risk. American Airlines Group Inc. warned July 2 that it would have over 20,000 more employees than it needs to operate a reduced schedule. Delta Air Lines Inc. said Tuesday at least 17,000 workers have left voluntarily or taken early retirement and 45,000 already have taken shorter leaves.

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