June 17, 2021

Gp Delivers

The excellent automotive artisans

Airlines, public transit say stimulus plan would prevent deep cuts, job losses

The legislation still must pass the House and get Biden’s signature, which could happen this week. If approved, many in the transportation industry said Monday, the legislation would provide critical support, keeping workers on the job and off the unemployment rolls.

“What this does is finish what we started — keeping the focus of the relief on the front lines,” said Sara Nelson, international president of the Association of Flight Attendants-CWA. “This should get us through this pandemic to where the industry is building back the demand.”

Eric Ferguson, president of the Allied Pilots Association, which represents 15,000 pilots at American Airlines, added: “By investing in the airline industry’s future, Congress is making a vital investment in our nation’s future.”

For airlines, the second extension of the payroll support program would come more than a year after the coronavirus surfaced in China and quickly spread across the globe, ending what had been a years-long boom in air travel.

U.S. airlines received $50 billion in grants and loans as part of the original Cares Act last March. Of that, $25 billion was aimed at keeping front-line workers — including flight attendants, mechanics and pilots — on the job through the end of September.

At the time, many thought the six-month timeline would be enough for the industry to recover from the impact of the virus, although it continues to suffer from low demand.

Efforts to extend the program before it expired at the end of September ran into trouble despite bipartisan support, resulting in the furloughs of tens of thousands of airline workers. Congress and the White House eventually agreed to an extension as part of the $900 billion relief package passed in December, in which airlines and airline contractors received an additional $16 billion in payroll support.

If the latest relief package is approved, airlines and airline contractors will receive $15 billion to keep workers on the job through the end of September. The legislation also includes the same prohibitions on executive compensation and stock buybacks that were part of the previous package.

Jeff Davis, a senior fellow at the Eno Center for Transportation, said the payroll support program helped airlines because it took one of their biggest costs, employee salaries, off their hands.

“As long as the federal government has backstopped most of their labor costs, [the airlines] were able to survive,” he said.

Even so, most analysts think the industry is far from a recovery, with many saying travel is unlikely to return to 2019 levels until 2023 or 2024.

Last month, the International Air Transport Association revised its outlook for airlines, saying new variants have proved more difficult to control and have led to renewed travel restrictions.

“Financial prospects for the year are worsening as governments tighten travel restrictions,” said Alexandre de Juniac, IATA’s director general. “We now expect the industry to burn through $75 to $95 billion in cash this year, rather than turning cash positive in the fourth quarter, as previously thought.”

Airlines for America, which represents many major U.S. carriers, said airlines reported roughly $46 billion in pretax losses in 2020. Passenger volumes remain 58 percent below pre-pandemic levels.

But there are glimmers of hope.

Officials at the Transportation Security Administration said officers screened more than 1.2 million people at airport checkpoints Sunday — the most since Jan. 3, when the agency screened about 1.3 million people as people returned home after the holidays.

Public transit agencies on Monday also remained cautious, with most saying they did not want to signal relief until a bill is passed. Even so, many saw the projected $30.5 billion for transit as a final leg of federal aid they need to get through the pandemic and on to stable financial footing.

The Metropolitan Transportation Authority of New York, the nation’s largest public transit agency, said it expected to receive more than $6 billion if the act passed. The Washington metropolitan region, meanwhile, was projected to receive $1.4 billion, according to Senate staffers. While the bulk of those fund will go to Metro, other systems including the VRE and MARC commuter rail systems would also receive funds.

“This funding is crucial as we work to bring back ridership and recover from the pandemic. Critically, it will also further offset covid’s impact and help protect against devastating service cuts and layoffs in the years ahead where we still face deficits,” MTA CEO Patrick J. Foye said in a statement. “We look forward to the House’s swift passage of this plan and President Biden signing it into law.”

The aviation industry, too, said the infusion of government support will prove a critical boost for the industry.

“We appreciate the provisions within the American Rescue Plan (ARP) that extend the successful Payroll Support Program (PSP), which has been vital to preserving the jobs of the U.S. airline industry’s hard-working employees — flight attendants, pilots, mechanics, gate agents and others,” Airlines for America said in a statement. “We are grateful that Congress has recognized that our employees are the backbone of the industry and its greatest resource, and an important component of any broader U.S. economic recovery.”

Justin George contributed to this report.