Under the new coronavirus relief package, the struggling US carriers would get $17 billion in U.S. government aid.
On December 14, 2020, the US Congress announced the new relief package, if passed, would extend the Payroll Support Program (PSP), help cover payrolls and recall furloughed workers. The legislation immediately got support from the aviation industry.
“We appreciate the support that the U.S. government extended in March, and we ask Congress to pass the Emergency Coronavirus Relief Act of 2020 to preserve the jobs of airline employees. We strongly encourage the Senate and the House to approve this legislation swiftly and for the President to sign it into law,” Airlines for America announced in a press release.
On December 15, 2020, after two day of losses, airlines’ shares started rising again, reported Bloomberg News.
Airlines previously received $25 billion under the CARES Act in March 2020. The aid helped them to pay staff and avoid job cuts until October 2020. Once the financial support expired, American Airlines (A1G) (AAL) and United Airlines furloughed more than 32,000 workers in October 2020. Since then, airlines have been lobbying for additional financial aid to keep workers on the payroll.
“Thousands of airline workers across the country were furloughed on October 1. U.S. airlines have said they will work to restore those jobs if the PSP is extended, but that becomes increasingly challenging with each passing day,” outlined Airlines for America.
In November 2020, the International Air Transport Association (IATA) reported that North American carriers saw a 91.3% traffic decline in September 2020. North American airlines have lost more than $36 billion in 2020.
According to Airlines for America, due to resurgence in COVID-19 cases, passenger volumes during the holiday travel season remain down by nearly 70%. The US carriers are reporting a slow down in new bookings and a spike in cancellations.