US airlines closing in on new government assistance package

Airline workers would be paid retroactive to Dec 1, 2020. PHOTO: AFP

WASHINGTON/CHICAGO (REUTERS) - US airlines are on the brink of receiving a four-month extension of a government assistance programme that is expected to provide another US$17 billion (S$22.5 billion) to fund payroll costs, congressional aides told Reuters.

A roughly US$900 billion coronavirus relief Bill still under negotiation would allocate US$17 billion to airlines and allow them to bring back more than 32,000 workers furloughed in October, after a prior six-month US$25 billion measure expired on Sept 30.

A final deal on the US$900 billion relief package could be reached as early as Thursday morning in the United States.

Airline workers would be paid retroactively to Dec 1 and airlines would have to resume flying to some routes they stopped operating after the aid package expired, congressional aides briefed on the talks told Reuters.

Airline workers could not be furloughed through March 31 as a condition of the assistance.

Reuters first reported on Dec 1 that a bipartisan US$908 billion proposal included US$17 billion for airline payroll assistance, as well as US$15 billion for US transit systems, US$4 billion for airports, US$1 billion for passenger railroad Amtrak and US$8 billion for private bus companies and other services.

In October, American Airlines furloughed 19,000 employees while United Airlines furloughed more than 13,000 employees.

American Airlines suspended flights to some smaller US airports in October.

On Dec 9, the number of passengers screened at US airports dipped to 501,513, the lowest number since July 4 as Covid-19 cases spiked.

The new assistance programme is expected to mirror the earlier US$25 billion programme approved by Congress in March, which required larger airlines to repay 30 per cent of the payroll grants over time and offer the government warrants.

US carriers are losing US$180 million in cash daily, with passenger volumes down 65 per cent to 70 per cent and cancellations rising, industry lobby Airlines for America said.

Congress previously set aside another US$25 billion for airlines for low-interest loans.

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