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Key U.S. lawmakers back unions' call for new airline bailout

Credit: REUTERS/JOSHUA ROBERTS

By David Shepardson and Tracy Rucinski

WASHINGTON/CHICAGO July 16 (Reuters) - Key U.S. House Democrats are backing a push by airline unions for a new round of government bailouts to keep workers employed in the face of tens of thousands of possible layoffs this fall.

Representative Peter DeFazio, who chairs the House Transportation and Infrastructure Committee, and other Democrats are circulating a letter to colleagues calling for the extension of payroll assistance. In March, Congress approved $32 billion for airlines and contractors in exchange for the companies keeping workers on the job through Sept. 30. Airline unions in June sought another $32 billion to keep workers employed through March 31.

The lawmakers' letter said "with the current resurgence of COVID-19 in several states across the country and a vaccine for the virus yet to be developed, passenger demand for air travel will not recover before" Sept. 30 and "hundreds of thousands of airline workers may be fired or furloughed starting October 1."

Airline unions on Wednesday asked lawmakers to sign on to the DeFazio letter.

On Wednesday, American Airlines AAL.O said it was sending 25,000 notices of potential furloughs to frontline workers. American had already warned that furloughs would be hard to avoid as pandemic-hit revenue remains more sluggish than the airline had hoped.

American said Wednesday it would be "supportive" of any legislation that would protect employee jobs, while an industry trade group previously said airlines were not seeking additional assistance "at this time."

United Airlines UAL.O has sent 36,000 furlough notices, representing about 45% of workers, and Southwest Airlines LUV.N has warned job losses will be hard to avoid.

Delta Air Lines Inc DAL.N said this week it believed it could avoid furloughs in the fall after about 17,000 employees signed up for early departure deals.

After boosting summer flying following some signs of pent-up leisure demand in May and June, some airlines are now scaling back their schedules due to a surge in COVID-19 cases across the country.

(Reporting by David Shepardson and Tracy Rucinski Editing by Chizu Nomiyama and Steve Orlofsky)

((David.Shepardson@thomsonreuters.com; 2028988324;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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