Airlines Set to Receive Billion in Federal Aid | Financial Buzz

Airlines Set to Receive $15 Billion in Federal Aid

U.S. airlines will be granted an additional USD15 Billion in federal aid to pay workers amid the recently passed USD900 Billion coronavirus relief deal. Carriers would need to bring back over 32,000 furloughed workers as a part of the new aid. The deal, passed on Sunday, will also offer relief to other travel sectors such as hotels. 

The CARES Act released in March offered USD25 Billion for U.S. airlines with the condition that they provided minimum service levels and did not lay off any employees through September 30. Though both labor unions and airlines pleaded with lawmakers to provide further aid as the deadline neared, Congress and the White House did not reach a deal by the cutoff date. 

After two months of back and forth in Washington the deal was passed and is considered a “clean extension” to the initial cash distributed earlier in the year. Though the relief is USD10 Billion less than what was requested, the USD15 Billion is expected to aid the industry’s economic downturn.

Both United Airlines and American Airlines furloughed around 32,000 workers in October, following the original aid’s expiration. As many struggled within the industry, carriers urged employees to take buyouts and early retirement as they were forced to cut thousands of jobs. Additionally, Southwest Airlines, a carrier that has never furloughed workers in approximately 50 year, cautioned employees it may need to cut around 7,000 jobs unless it is able to settle on cost-cutting deals with labor unions. 

Aside from airline aid, the new stimulus package will offer USD1 billion for airline contractors, USD2 billion for airports and concessionaires, USD14 billion for transit, USD10 billion for state highways, USD1 billion for Amtrak and USD2 billion for private bus, school bus and ferry companies.

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