Airline industry leaders tell Congress that they need more money to stay afloat

Photo (c) Kittisak Jirasittichai EyeEm - Getty Images

This would be the third round of government assistance for the industry if it is approved

The case for giving the U.S. airline industry another serious shot in the arm was made on Capitol Hill on Tuesday. In testimony made to lawmakers, Nicholas E. Calio, President and CEO of Airlines for America (A4A), minced no words in asking for a third round of government assistance. 

“We are still struggling and in dire straits,” he told the House Transportation and Infrastructure’s aviation subcommittee. “We were hoping it would be better by now.”

The $1.9 trillion COVID-19 relief package that the U.S. House of Representatives approved last week includes a new infusion of $14 billion for passenger airlines to keep workers on payrolls for an additional six months. Calio says that $14 billion will help, but he warned the committee that tens of thousands of aviation workers will “lose their jobs — or experience reductions to wages and benefits — effective April 1” if a new round of assistance isn’t approved. 

Congress steps up for a third time, but will it again?

If the Senate rubber-stamps passage of the supplemental aid, it will be the third time Congress has come to the aid of airlines, airports, and aviation contractors. To date, Congress has made nearly $90 billion in assistance and loans available, including two previous rounds of payroll assistance amounting to $40 billion.

Joining Calio was Joseph DePete, president of the Air Line Pilots Association. He echoed Calio’s sentiment, telling committee members that “dismal long-term booking commitments and the near absence of business travel demand is leaving some carriers with too little certainty to reactivate and retrain furloughed or otherwise inactive pilots.”

According to testimony seen by Reuters, Representative Peter DeFazio (D-OR), chair of the Transportation committee, said he is “hoping by September 30 we are not going to need another extension” of airline payroll assistance.

From bad to worse

Adding to Calio’s and DePete’s warnings, the International Air Transport Association (IATA) announced that passenger traffic fell in January 2021, not only compared to pre-pandemic levels (January 2019) but also compared to the immediate month prior (December 2020).

Domestic travel took quite a punch, dropping by 47.4 percent year-over-year. However, the impact was really felt on the international level, where passenger demand in January was 85.6 percent below January 2019.

“2021 is starting off worse than 2020 ended and that is saying a lot. Even as vaccination programs gather pace, new COVID variants are leading governments to increase travel restrictions. The uncertainty around how long these restrictions will last also has an impact on future travel. Forward bookings in February this year for the Northern Hemisphere summer travel season were 78 percent below levels in February 2019,” said Alexandre de Juniac, IATA’s Director General and CEO.

De Juniac parroted the need for government financial support, but he said the real keys for governments to unlock economic activity -- including travel -- are increased testing capability and vaccine distribution. 

“It is critical that governments build and share their restart plans along with the benchmarks that will guide them. This will enable the industry to be prepared to energize the recovery without any unnecessary delay,” the executive said.

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