Two key GOP senators propose $28 billion in airline assistance to avoid job cuts

Two key GOP senators propose $28 billion in airline assistance to avoid job cuts
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© Reuters. Federal Aviation Administration (FFA) oversight of aircraft certification hearing on Capitol Hill© Reuters. Federal Aviation Administration (FFA) oversight of aircraft certification hearing on Capitol Hill

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By David Shepardson

WASHINGTON (Reuters) – Two key Republican senators on Monday introduced legislation that would authorize $28.8 billion in payroll assistance to avoid thousands of airline industry layoffs set to begin on Oct. 1.

Senators Roger Wicker, who chairs the Commerce Committee, and Susan Collins, who chairs the appropriations subcommittee overseeing airline issues, introduced the measure that would grant airlines a new bailout days before existing payroll support runs out.

The bill would tap $11.2 billion in new funds and $17.4 billion in funding repurposed from other unspent funds from prior coronavirus relief measures.

Congress in March approved $25 billion in payroll assistance but required airlines not to cut jobs or flights through Sept. 30.

The White House said last week it is also open to a stand-alone measure to aid airlines, though congressional aides say that is unlikely to win passage given aid requests from so many other struggling industries

The Wicker-Collins bill would dedicate $25.5 billion for new passenger airlines and allow smaller airlines to qualify for 15% additional funds versus the initial round.

It would set aside $300 million for cargo carriers and $3 billion for airport contractors.

Airlines for America, a trade group representing American Airlines (O:), Delta Air Lines (N:), United Airlines (O:), Southwest Airlines (N:) and others praised the bill.

“These are dire times for the U.S. airline industry. COVID-19 continues to spread and wreak havoc on the U.S. economy, lasting far longer than anyone envisioned,” the group said. “We are running out of time to protect the jobs and livelihoods of these men and women. We urgently need for Congress to act now.”

Major airlines that have shed thousands of employees through voluntary exit programs would be entitled to receive the same payroll support they did in the first round. In April, major airlines qualified for about 75% of payroll costs.

Large airlines were required to repay 30% of grants.

American Airlines said without new aid it plans to end service to 15 small communities and furlough about 19,000 workers.

Air travel has plummeted over the last six months as the coronavirus pandemic has claimed nearly 200,000 American lives and prompted many to avoid airports and planes, seriously depressing airline revenues.

Congress also set aside another $25 billion in government loans for airlines, but many have opted not to tap them.

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