Congress takes another run at airline bailout; fate unclear

House Democrats on Friday proposed a new $28.8 billion bailout for the airline industry after the carriers began furloughs of more than 32,000 workers to cut costs during a pandemic that has devastated air travel.

Speaker Nancy Pelosi urged the airlines to delay those furloughs while Congress tries to approve the money.

American Airlines repeated its previously stated position that it will reverse 19,000 job cuts if Congress and the White House agree on more payroll aid in the next few days, but stopped short of following Pelosi’s wishes.

United Airlines which started to furlough 13,000 workers, will undo the furloughs “once Congress has passed legislation ... but they need to act quickly,” said spokesman Frank Benenati. Alaska Airlines which furloughed about 530 workers, did not immediately comment.

The airlines and their unions are seeking more taxpayer money to prevent furloughs through next March. Congress approved $25 billion in payroll aid six months ago in hopes that the travel industry might be stronger by fall. The money and an accompanying ban on layoffs expired Thursday.

There is widespread support in Congress for giving the airlines another $25 billion, but the plan bogged down as congressional Democrats and the White House failed to agree on a larger pandemic-relief measure. Until now, lawmakers have avoided giving money to just one industry while others are struggling and laying off workers, including hotels, restaurants and retail stores.

On Friday, House Transportation Committee Chairman Peter DeFazio introduced a stand-alone measure to give up to $25.5 billion to passenger airlines, $3 billion to their contractors and $300 million to cargo airlines.

The money would be earmarked for wages and benefits through next March. Airlines would keep their current workforces intact without dipping into the billions they have raised from private lenders and up to $25 billion in low-interest government loans that Congress approved six months ago.

“We will either enact Chairman DeFazio’s bipartisan stand-alone legislation or achieve this as part of a comprehensive negotiated relief bill,” Pelosi said. While Congress works on the matter, “the airline industry must delay these devastating job cuts,” she said.

The bill picked up a quick Republican endorsement from Sen. John Cornyn of Texas, who is up for re-election next month in the state where American and Southwest are based and have thousands of employees. Cornyn is one of 16 Senate Republicans who earlier supported another round of money for airlines.

Airline stocks were higher in late trading Friday.

U.S. air travel has recovered partially since falling 96% in mid-April but it remains down nearly 70% from a year ago, and the industry is losing billions of dollars a month. With no available vaccine, and the U.S. reporting more than 40,000 new confirmed cases of COVID-19 a day, forecasts for holiday-season travel look grim.

“All airlines face an uncertain winter, and an extension to the Payroll Support Program would protect jobs across our industry until next spring and ensure airlines are here to help support the economic recovery when we are through this,” said Emily Martin, a spokeswoman for JetBlue Airways, which hasn’t announced any furloughs.

Airlines have cut tens of thousands of jobs by offering early retirement and buyouts to workers. Delta and Southwest said they used voluntary departures to avoid furloughs this week. But Delta pilots could be furloughed in November if they don’t agree to contract concessions, and Southwest CEO Gary Kelly warned that his airline would need to consider layoffs unless it gets more federal help.