A massive pandemic-relief measure approved in March set aside up to US$50 billion in cash and low-interest loans for the passenger airlines in the United States.
American Airlines was the largest recipient — US$10.7 billion if a pending loan wins final approval from the U.S. Treasury Department.
In return for taxpayer dollars, airlines were barred from furloughing workers and were required, in most cases, to continue serving destinations they had before the pandemic. Both of those conditions expire September 30.
Passenger airlines and their labor unions are lobbying for an additional US$25 billion to keep paying workers and avoid furloughs through next March. Cargo airlines and contractors would get US$7 billion.
The push by airlines and labor has received significant support in Washington. A majority of the Democratic-controlled House endorsed the additional money, so did 16 Senate Republicans. President Donald Trump spoke favorably about helping the airlines when asked about the proposal.
However, the provision is wrapped up in discussions over a larger virus-relief package that would include extended unemployment benefits and, Democrats hope, aid to cities and state governments. The fate of that measure is unclear after negotiations between congressional Democrats and the White House broke down more than a week ago.
An American Airlines executive cited the stalemate in Washington for the airline’s decision to cut service to some destinations.
“We have been holding off, hoping that we would come to some sort of agreement that would extend (the payroll money) and would extend the service requirement. That broader negotiation does seem to be stalled, and this is an unfortunate casualty of that,” said the executive, who spoke on condition of anonymity to explain private discussions about the decision.-AP
