US Airlines To Get Another $14 Billion In Government Aid

The United States Senate passed a stimulus package on March 6th that will include another $14 billion for airlines under the Payroll Support Program (PSP). The support package will preclude airlines from laying off or furloughing additional workers through the fall and keep people employed. Though the full package has a few more steps to go, it is quite likely that the airlines will have another $14 billion headed their way.

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US airlines are poised to get the third round of government support. Photo: Getty Images

US Senate passes relief bill

Dubbed the “American Rescue Plan Act of 2021,” the US Senate passed a pandemic relief package that includes $14 billion for airlines.

The bill, once enacted, would give airlines the third round of government support with conditions similar to the previous two rounds of government support.

The airlines will get the money, and then the airlines will not be able to furlough, layoff, or reduce salaries for employees through September 30th, 2021.

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Nearly every US carrier is expected to participate in round three of support. Photo: Getty Images

Airlines will also need to refrain from repurchasing their shares or paying dividends through September 30th, 2022. This applies to carriers who take money through the extended PSP. There are also limits to executive compensation.

The Allied Pilots Association’s President, Captain Eric Ferguson, stated the following on the additional aid:

“Thanks to the American Rescue Plan Act of 2021, our airlines will be well-positioned to continue global vaccine distribution and drive economic recovery as the COVID-19 pandemic recedes. By investing in the airline industry’s future, Congress is making a vital investment in our nation’s future.”

The third round of relief for airlines

The first round of airline relief came in March of last year when airlines received $25 billion in direct grants under the PSP and could access parts of the $25 billion allocated under loans and loan guarantees. The first round of support precluded airlines from performing involuntary layoffs through September 30th, 2020.

The second round came in December, with another $15 billion in relief for airlines. Those conditions for receiving funds were just about a carbon copy of the restrictions from the first round, though those furlough restrictions continued through March 31st, 2021. Airlines, however, warned that the temporary relief would pass, and furloughs would need to happen after the March 31st date passed.

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Air transport labor unions pushed hard for the third round of support, citing the industry jobs at stake. Photo: Getty Images

Some of the second round of support is still going out to airlines. Southwest Airlines, only on Friday, received its second installment of the second round of support. Other airlines are soon to follow in announcements of disbursements.

Now, US carriers seem to be gearing up to get the third round of support, nearly a year after receiving the first round of support. There are still a few steps to go, but once President Biden signs it, which he is very likely to do, the money will soon head over to airlines. This comes after one airline that had lobbied the hardest for additional support, American Airlines, CEO made comments late last year indicating that he believed the second round would be the last one needed for the industry.

Will this be the last round of support?

After just about every relief bill passage, airline industry support groups started to rally around the need for another extension. Ahead of the second one, US airline CEOs lobbied Congress and the White House for an extension. This third one, however, has the chance to be the last round of support.

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Delta Air Lines expects to be cash break-even in the spring, though it is still expected to participate in getting government funding. Photo: Getty Images

The reason is that, heading into the summer, there is a lot of hope that, as vaccinations continue and more shots get in people’s arms, people will start booking airline tickets again and be willing to travel some more.

Already, many airlines are hoping to become profitable in the spring or beyond. Most are hopeful the summer will help them get over their losses and into more friendly revenue territory. If that does happen, then the airline industry will likely see the last of the government aid. But, as is clear with the ongoing crisis, anything can happen.

Are you glad the airlines have gotten the third round of support? Do you think airlines should get a fourth? Let us know in the comments!