US senate unanimously approves $58bn package for airlines
Late last night the US senate voted unanimously in favour of a $58bn (£49bn) rescue package for its struggling aviation industry, which has been decimated by the plunge in travel demand caused by coronavirus.
Almost half – $25bn of the total package – comes in the form of grants, which airlines will use to continue to pay around 750,000 employees.
The rest of the package is made up of another $25bn in loans, a further $8bn for cargo carriers, as well as $3bn for airport contractors.
The House of Representatives will vote on the package tomorrow, with President Trump having already promised to sign it into law.
Some Republicans had opposed the measures and had initially wanted to offer loans only, but warnings from the industry that it would have to immediately begin laying off employees convinced them otherwise.
Republican senator for Pennsylvania Pat Toomey, whose party had proposed $58bn in loans, said the grants had been an impasse:
Sign up to Morning Wire’s Midday Update newsletter, delivered to your inbox every lunchtime
“Democrats insisted we give away money to airlines and never get it back”, he said.
Sara Nelson, president of the International Association of Flight Attendants, said: “This is not a corporate bailout; it’s a rescue package for workers”.
Companies in receipt of the funding will now not be able to lay off workers before 30 September, providing much needed security in a particularly exposed sector.
If approved by the House of Representatives, the US will become the latest country to step in to prop up its aviation sector.
Shares in United, American, and Delta Airlines jumped on the news, all rising between 10 and 15 per cent.
Last week global aviation body the International Air Transport Association called for $200bn in collective worldwide state aid to protect the industry.
UK airlines are understood to be in one-to-one negotiations with the government after chancellor Rishi Sunak said that help would only be given as a “last resort”.
Industry body Airlines UK yesterday wrote to the chancellor asking for airlines to be exempt from air traffic control charges and air passenger duty to help it survive the coronavirus crisis.