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U.S. airlines face push-back in Congress on $50 billion bailout proposal

By David Shepardson
FILE PHOTO: Several canceled flights are pictured on a monitor at Seattle-Tacoma International Airport as airlines are reeling from a plunge in bookings and traffic due to the coronavirus pandemic, in SeaTac, Washington

By David Shepardson

WASHINGTON (Reuters) - Some Democrats in Congress are pushing back on aspects of a proposal by major airlines seeking $50 billion (41.4 billion pounds) in grants and loans in the face of the massive travel slowdown as a result of the coronavirus pandemic.

Airlines for America, which represents American Airlines <AAL.O>, United Airlines Inc <UAL.O>, Delta Air Lines Inc <DAL.N>, Southwest Airlines Co <LUV.N> and others, said the industry needs $25 billion in grants, $25 billion in loans and significant tax relief, including the return of at least $4 billion in taxes paid this year, to survive.

It warned that without action, airlines could run out of money by year-end - and even sooner if credit card companies withhold payments.

Democrats are expected to back assistance to the sector. But aides say they will likely demand significant conditions as part of any bailout and its form is still uncertain.

U.S. House Speaker Nancy Pelosi and some others insist that any bailout must prioritise workers, while others want airlines to adopt consumer-friendly or environmentally sound business practices as a condition of a bailout.

Representative Alexandria Ocasio-Cortez said on Twitter that "96% of airline profits over the last decade went to buying up their own stocks to juice the price - not raising wages or other investments. If there is so much as a DIME of corporate bailout money in the next relief package, it should include a reinstated ban on stock buybacks."

Drew Hammill, a spokesman for Pelosi, said she and Peter DeFazio, chairman of the House Transportation and Infrastructure Committee, discussed the accelerating impact of the coronavirus pandemic on the aviation and transportation sectors with Treasury Secretary Steven Mnuchin on Tuesday.

They "emphasized that protecting workers' paychecks and benefits was their top priority, and that immediate action was needed," Hammill said.

DeFazio and Pelosi were to speak by phone with a group of airline chief executives later in the day, Hammill added.

Senator Richard Blumenthal wrote on Twitter that there should be "no blank check industry bailouts. To receive taxpayer money, airlines must stop fleecing flyers with fees & short-changing safety. Consumers & workers need protection."

United Chief Executive Oscar Munoz and union leaders at the airline warned in a letter to U.S. officials on Monday that "financial support that you provide would allow United to continue paying our employees as we weather this crisis – protecting tens of thousands of people from imposing a temporary furlough."

Airlines are also seeking $8 billion for cargo carriers, equally divided in grants and loans. Airports are seeking at least $10 billion in assistance, sources told Reuters on Monday.

(Reporting by David Shepardson; Editing by Dan Grebler)