Airlines Could See More Relief Ahead Of Stimulus Deal, Pelosi Says

Topline

House Speaker Nancy Pelosi (D-Calif.) Friday urged major airlines to delay more than 30,000 planned job cuts, citing “imminent” relief for the embattled industry. 

Key Facts

“Today, I am calling upon the airlines to delay their devastating job cuts as relief for airline workers is being advanced in Congress,” she said in a statement. 

The cuts and furloughs set to take effect this week—including 19,000 from American Airlines and 13,000 from United—were prompted by the expiration of a $25 billion federal aid program set up under the CARES Act. 

In a statement, Pelosi said the “imminent” support would either come as part of a new relief plan (if top policymakers can come to an agreement) or be part of a stand-alone bill.

That’s a major reversal for the Speaker of the House, who up until now has been adamant that aid legislation not be passed on a “piecemeal” basis.

Treasury Secretary Steven Mnuchin, who has negotiated with Pelosi for months on the next round of federal coronavirus aid, has been a proponent of more industry-specific aid for struggling sectors including airlines, restaurants and hotels. 

Shares of United jumped more than 2% on the news, and shares of American saw a 3% boost. 

Crucial Quote 

“As relief for airline workers is being advanced, the airline industry must delay these devastating job cuts,” Pelosi said in a statement. 

Key Background

Along with retail and restaurants, the airline industry is among the hardest-hit by the coronavirus pandemic. Under the $2.2 trillion CARES Act in March, ten airlines received a cumulative $25 billion in rescue funding. That bailout came with several crucial conditions, including that the airlines agree to keep on 90% of their staff through September and suspend stock buybacks and dividend payments.

Further Reading 

United, American Airlines Could Furlough 32,000 Staff As Washington Struggles To Agree On Bailout Billions (Forbes)

American Airlines Will Cut 19,000 Jobs In October As Coronavirus Decimates Travel Industry (Forbes)

Stimulus Update: After Lackluster Jobs Report And Trump’s Covid-19 Bombshell, Pelosi Signals A Deal Is Still Possible (Forbes)

Stocks Slammed As Markets Grapple With Weak Jobs Data, Covid In The White House (Forbes)

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