More than a dozen Republican senators on Wednesday backed $25 billion in additional federal aid for the airline industry as a spike in coronavirus cases in the U.S. hurt a nascent recovery in travel demand in recent weeks.
The added GOP support increases the likelihood that the funds get included in the next big aid package to help the U.S. weather the impact of the pandemic. More than 200 House lawmakers have already backed the extension, which would preserve jobs until the end of March 2021. The endorsement from GOP senators in the Republican-controlled Senate puts pressure on Senate Leader Mitch McConnell to include the provision in a final aid package.
U.S. passenger airlines were allocated $25 billion in aid, mostly in grants, that would preserve sector jobs through Sept. 30, but carriers have told more than 70,000 workers that their jobs are at risk after that deadline passes.
Meanwhile, travel demand remains at a fraction of last year’s levels.
“For these reasons, we support a clean extension of payroll support for passenger air carrier employees included in the CARES Act to avoid furloughs and further support those workers,” the 16 Republican senators wrote in a letter, which was seen by CNBC, to McConnell and Senate Minority Leader Chuck Schumer.
Labor unions had been urging Congress to extend the airline aid since June and CEOs of some of the largest U.S. carriers have recently said they back an extension. CEOs of American and Southwest, have said they have spoken with lawmakers and officials in Washington about the additional aid.
Airline executives have been encouraging their staff to take buyouts or early retirement and have also offered a host of other unpaid or partially-paid leaves of absence. Volunteers and shorter schedules have helped lower airlines’ labor costs in recent months, generally their largest expense.
Thousands of workers volunteered for the programs. Around 17,000 Southwest employees, about 28% of the company, have applied for leaves of absence or buyouts and the Dallas-based carrier said last month that it doesn’t expect to furlough or lay off workers this year.
Delta’s CEO Ed Bastian last week said 17,000 employees — close to a fifth of its staff — signed up for buyouts or early retirement.
“Each person who has opted to exit voluntarily moves us closer to our goal of minimizing furloughs and positioning Delta to weather the choppy recovery in the months and years ahead,” Bastian said in a staff memo last week.