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U.S. airlines make urgent call for new bailout as job cuts loom

Lucas Manfredi
·2 mins read

Major U.S. airlines plan to make a last-ditch bid to persuade Congress to grant them a new $25 billion bailout to help avert thousands of employee furloughs set to begin Oct. 1, even as a separate $25 billion in government loans for the sector sits untapped.

The chief executives of American Airlines, United Airlines and JetBlue Airways and major aviation unions were scheduled to hold a news conference on Capitol Hill on Tuesday afternoon calling for a six-month extension of a payroll support program that consisted primarily of grants in exchange for keeping workers on the payroll.

On Monday, two key Republican senators introduced legislation that would authorize another $25.5 billion in payroll assistance for passenger airlines, but congressional aides said it was unlikely to win passage given aid requests from many other struggling industries.

AMERICAN AIRLINES WARNS IT'S OVERSTAFFED BY ABOUT 8,000 FLIGHT ATTENDANTS

The first $25 billion in payroll assistance to airlines was included under the $2.3 trillion CARES Act aid package in March, which also set aside another $25 billion in government loans for airlines.

The Treasury Department signed letters of intent in July with 10 major airlines for the loans, which they can tap by Sept. 30. According to Treasury, none of those loans have been funded.

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Only American Airlines has said it intends to take the loans, which carry restrictions on share buybacks and executive compensation.

Airlines for America, a trade representing major U.S. airlines, said passenger volumes remain down approximately 70%, a third of the U.S. fleet is idled and the industry continues to lose $5 billion in cash per month.

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