U.S. airlines asked to delay furloughs if aid deal in sight

CHICAGO/WASHINGTON (Reuters) – U.S. Treasury Secretary Steven Mnuchin urged U.S. airlines to delay tens of thousands of furloughs set to begin Thursday if a bipartisan deal on a broad coronavirus relief package was in sight.

FILE PHOTO: Delta Air Lines passenger planes are seen parked due to flight reductions made to slow the spread of coronavirus disease (COVID-19), at Birmingham-Shuttlesworth International Airport in Birmingham, Alabama, U.S. March 25, 2020. REUTERS/Elijah Nouvelage

U.S. airlines are pleading for a second $25 billion bailout that would protect jobs for another six months as the current payroll support package is poised to expire at midnight.

Mnuchin told CNBC he planned to talk to chief executives of airlines later on Wednesday about ongoing talks with House Speaker Nancy Pelosi to reach a deal.

U.S. airline shares jumped on the news.

American Airlines Group Inc AAL.O Chief Executive Doug Parker told CNN that if there was a “clear and concrete path,” then “of course” he would delay the furloughs set to begin Thursday and said he was “really encouraged” by the ongoing talks.

Airline workers were gearing up to aggressively push lawmakers to reach a deal.

“It’s pedal to the metal until 11:59:59 on Sept. 30, and then some,” said flight attendant Amanda Steinbrunn, who is among some 13,000 United Airlines UAL.O employees set to be furloughed on Thursday.

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Pelosi has said she hopes to have a coronavirus aid deal with the White House this week, but the prospects of a comprehensive bill passing before Thursday were dim, industry officials said, and a quicker standalone bill for airlines would face the challenge of unanimous support.

Mnuchin said he did not think a standalone measure to avert airline layoffs was likely.

Weeks of intense airline lobbying has won over many but not all Washington lawmakers, while also drawing attention to the plight of other pandemic-hit industries as the crisis persists.

U.S. airline officials said earlier this week there were no plans in place to halt the furloughs without aid by Oct. 1, and it was unclear what would happen if a deal passes afterwards.

Thousands of employees have already been instructed to return their badges.

Airlines, which were awarded a separate $25 billion in federal loans under a first coronavirus relief bill in March and have also tapped capital markets to shore up liquidity, are operating about half their 2019 flying schedules and suffering a 68% decline in passenger volumes. [L1N2GR014]

The impact of the coronavirus on travel may cost as many as 46 million jobs globally, according to projections published on Wednesday by Air Transport Action Group (ATAG).

Airlines have argued they need trained employees to help drive an economic recovery as the crisis subsides. Parker told CNN he believed one more round of aid would be sufficient.

Allie Malis, who is among 19,000 on American Airlines’ furlough list, said she would keep pressing lawmakers on Wednesday.

“I’ve poured every ounce of my energy into passing this extension,” she said. “I don’t have a Plan B.”

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