US economy

Pelosi raises prospect of new airline bailout

Nancy Pelosi, the Democratic speaker of the House of Representatives, pleaded on Friday for US airlines to halt their plans to cut thousands of jobs, telling them that an agreement on further fiscal support for their sector and possibly the rest of the US economy would come soon.

“The massive furloughs and firings of America’s airline workers jeopardise the livelihoods of tens of thousands and threaten to accelerate the devastating economic crisis facing our nation,” Ms Pelosi said in a statement. “Today I am calling upon the airlines to delay their devastating job cuts as relief for airline workers is being advanced in Congress.”

Ms Pelosi said the federal aid for airlines to keep their employees on payroll — extending the support offered early in the pandemic — would either come through a broader stimulus package being hammered out with the Trump administration, or from a standalone bill tailored for the aviation sector.

Her call for airlines to halt their job cuts highlighted the mounting pressure on Congress and the White House to reach a compromise on new fiscal support to avoid deepening the economic pain heading into the November election. On Thursday evening the House of Representatives passed a $2.2tn stimulus package, which was roundly dismissed as excessive by congressional Republicans and the White House.

Ms Pelosi and Steven Mnuchin, the US Treasury secretary, continued their negotiations on Friday on the hunt for a deal. While Ms Pelosi suggested that US president Donald Trump’s coronavirus diagnosis might alter the dynamics of the negotiations by emphasising the seriousness of the health crisis, she also laid out several areas of lingering disagreement with the administration, including the scale of help for state and local governments, the language related to unemployment benefits, and the amount of tax credits for child care.

Even if a deal is reached in the coming days between Ms Pelosi and Mr Mnuchin, it is unlikely to be voted on in Congress well into next week, and it faces uncertain prospects in the Republican-controlled Senate, where lawmakers in the majority have been sceptical of the need for additional spending in excess of $1tn.

Airlines received a $50bn aid package in March, with half specifically earmarked to support payrolls. Legislative restrictions prevented airlines from furloughing employees for six months if they accepted the funds.

Lawmakers and industry executives had originally expected demand for air travel to rebound within that window. Instead, demand has remained depressed and airlines and aviation unions have watched for months as the bleak October 1 deadline approached.

American Airlines began furloughing 19,000 employees on Thursday, while United began to furlough 13,000.

But American chief executive Doug Parker said in a September 30 letter to staff that if congressional efforts “are successful over the next few days, we will reverse our furlough processes and recall any impacted team members”.

Delta Air Lines and Southwest Airlines have delayed the day of reckoning. Delta plans to cut pilots on November 1. Southwest, which has never furloughed employees in its five-decade history, has told staffers their jobs remain safe until the end of the year.

Gary Kelly, Southwest chief executive, on Thursday said that if lawmakers fail to extend additional aid, “we’ll be forced to . . . reduce our salaries, wages and benefits specifically by seeking concessions, or as a last resort, lay-offs and furloughs”.

Aviation unions have continued to push for legislation even as the deadline passed. Sara Nelson, president of the Association of Flight Attendants-CWA, tweeted on Friday that supporters needed to mobilise to save jobs.

“We have a bill in the House,” she wrote. “Payroll Support Program Extension Act, HR 8504. Burn up the House lines everyone. Call and demand this is passed now.”



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