WASHINGTON (Reuters) – Democrats within the U.S. Congress are to release a sweeping plan on Monday to provide more than $50 billion in additional aid to U.S. airlines, transit systems, airports, and passenger railroad Amtrak and create a $3 billion program to help aviation manufacturers with payroll costs, according to documents seen by Reuters and sources briefed on the matter.
The $1.9 trillion COVID-19 relief proposal will provide $30 billion to transit agencies, $14 billion for passenger airlines, $8 billion to U.S. airports, $1 billion for airline contractors, and $1.5 billion to Amtrak, the draft legislation says. U.S. House committees are set to vote on the legislation on Wednesday.
Airline stocks rose sharply on news of the new funding, with American Airlines up 4.2%, whereas United Airlines gained 5% and Southwest Airlines jumped nearly 6%.
President Joe Biden had proposed $20 billion for struggling U.S. transit agencies – and nothing for airlines – while Democrats had pushed for more transit help, citing the collapse in travel demand as a result of the COVID-19 pandemic.
Transit agencies have previously been awarded $39 billion in emergency assistance by Congress. New York’s Metropolitan Transit Agency says everyday subway travel has recently been down 70% or more.
U.S. airlines have been awarded $40 billion in payroll assist since March and airline unions had asked Congress for another $15 billion to keep 1000’s staff on the payroll past March 31, when the current round of funding expires. The additional $14 billion will maintain nearly 30,000 airline employees on the job by Sept. 30.
An abstract of the $14 billion airline payroll proposal from the House Financial Services Committee seen by Reuters noted airways lost over $35 billion in 2020 and “airways don’t expect to return to profitability till midway through 2021.
The $3 billion aviation manufacturing program would provide a 50% government subsidy to cover costs of pay, benefits, and training for employees at risk of being furloughed or who were furloughed due to the pandemic. The grants cover up to 25% of a company’s U.S. workforce.
U.S. airplane manufacturer Boeing and suppliers have minimized thousands of manufacturing jobs over the last yr as demand for new planes has shrunk amid the collapse in airline travel.
Boeing mentioned that last yr it recorded severance costs for 26,000 employees in 2020, with 18,000 having left the last yr and the remainder anticipated to depart in 2021. Boeing didn’t immediately comment on the program.
International Association of Machinists and Aerospace Workers (IAM) President Robert Martinez urged lawmakers to back the effort to provide payroll help to “assist this essential workforce and supply chain to weather the storm of this historic pandemic.”
