Republican senators back extending $25 billion payroll aid for U.S. airlines; shares jump
A group of Senate Republicans on Wednesday backed extending a $25 billion payroll assistance program for U.S. airlines after warnings that carriers may be forced to cut tens of thousands of jobs without government action, according to a letter seen by Reuters.
Airline stocks moved sharply higher on the news, which was first reported by Reuters. Shares of American Airlines (AAL.O) closed up 9.5% while shares of United Airlines (UAL.O) rose 4.6% and Southwest Airlines (LUV.N) finished up 4.2%.
The letter, spearheaded by Senator Cory Gardner and addressed to Senate Majority Leader Mitch McConnell and Senate Minority Leader Chuck Schumer and copied to Treasury Secretary Steve Mnuchin, was the first public disclosure of significant support in the Republican-led Senate for additional emergency funding for U.S. airlines. A spokesman for McConnell declined to comment.
Senators Marco Rubio, Roger Wicker, James Inhofe, James Risch, John Cornyn, Todd Young, Susan Collins, Martha McSally, Shelley Moore Capito and others who signed the letter said they backed a new six-month extension of the $25 billion payroll support program “to avoid furloughs and further support those workers.”
After Reuters reported the letter, Cornyn’s office released a copy of it and declined to comment further.
Airline officials and unions have been urging U.S. lawmakers to extend new assistance in the face of the coronavirus epidemic’s devastating impact on airline travel.
“With air travel anticipated to remain low in the near future, Congress should also consider provisions to support and provide flexibility for businesses across the aviation industry similarly impacted, such as airport concessionaires and aviation manufacturing,” the letter said.
On July 27, a majority of the Democratic-controlled U.S. House of Representatives signed a letter also calling for a six-month extension for the payroll aid program that they argue is crucial to keeping hundreds of thousands of aviation workers employed through March 31. That letter was signed by 195 Democrats and 28 Republicans.
Congress awarded $25 billion in payroll assistance to U.S. passenger airlines in March, along with $4 billion for cargo carriers and $3 billion for airport contractors. Most of the bailout funds do not have to be paid back.
Congress also approved a separate $25 billion in low-cost loans for passenger airlines; many airlines have not yet tapped those loans.
Airline executives feel increasingly optimistic Congress will act, while chief executives and union leaders have been calling lawmakers to push for additional assistance.
Sara Nelson, international president of the Association of Flight Attendants-CWA, which represents nearly 50,000 flight attendants at 19 airlines, said the letter on Wednesday demonstrated “overwhelming bipartisan majority support” for a another $25 billion six-month extension of the payroll program.