A $20 billion stimulus package offered for the struggling airlines industry

The beleaguered airline industry is hopeful of a stimulus package under the new payment proposal.



Under a new counteroffer of $1.6 trillion proposed by the U. S. Treasury Secretary Steven Mnuchin, there is a measure to extend a $20 billion in aid to the battered airline industry, White House chief of staff Mark Meadows said on Wednesday,

“There’s $20 billion in the most recent proposal for the airlines that would give them a six-month extension.

He noted that the industry was in urgent need of some infusion of money. Recently, American Airlines and United Airlines, two of the largest U.S. carriers, announced that they were planning to furlough over 32,000 workers from Thursday.

U.S. airlines have been pleading for another $25 billion in payroll support for another six month to protect the jobs in the industry.

The current package availed by the industry banned further furloughs, but it expired on Wednesday.

The new stimulus package has been long under discussion with the White House not ready to extend the aid beyond $1.5 trillion.

But in a bid to push the package, the Treasury Secretary Mnuchin has proposed $1.6 trillion to persuade the Democrats to come to the table to discuss the matter.

“As you get above $1.5 trillion, it gets extremely difficult to justify based on the facts,” Meadows cautioned, explicitly stating that $2 trillion was too much. “If it starts with a 2, it’s going to be a real problem,” he added.

American Airlines CEO Doug Parker said that if Washington comes up with a deal with $25 billion for airlines “over the next few days,” the company will reverse the proposed 19,000 furloughs set to begin Thursday.

United Airlines said the impasse in the House-Senate had forced it to furlough 13,000 workers. Like American Airlines, it too was ready to reverse the order if timely aid was provided.

“It provides a glimmer of hope that something will get done,” said Nicholas Calio, president of the trade group Airlines for America.

Treasury Secretary Mnuchin said Wednesday night that the administration wants to help the beleaguered travel and hospitality industry.

“I don’t think we’re going to make significant progress” until Thursday he said in an interview.

“Ideally, if it’s going to go beyond Thursday they will be close to a deal and say, ‘Hang on for a couple days,’ and we can wait,” Calio said. “Beyond that, the notices have gone and furloughs will go into effect.”

Sara Nelson, president of the Association of Flight Attendants, was hopeful of a quick solution as the airline relief measure was a major part of stimulation packages from both the parties.

She said a bailout that keeps airline workers out too the unemployment lines is beneficial to all.

“These are people who are not going to be able to pay their rent, they are not going to be able to take care of themselves,” Nelson said on CNBC.

Avatar
Christy Gren
Christy Gren is an Industry Specialist Reporter at Industry Leaders Magazine; she enjoys writing about Unicorns, Silicon Valley, Startups, Business Leaders and Innovators. Her articles provide an insight about the Power Players in the field of Technology, Auto, Manufacturing, and F&B.

Recent Posts

Morgan Stanley raises CEO James Gorman’s pay to $33 million

Morgan Stanley raises CEO James Gorman’s pay to $33 million

James Gorman’s salary ($33 million) is comprised of four parts: a base salary of $1.5 million; a deferred equity award of $7.875 million; ...
2 hours ago
IBM Q4 Profit Up, Banks on Cloud and AI For 2021

IBM Q4 Profit Up, Banks on Cloud and AI For 2021

IBM’s revenue is expected to rise in 2021 and generate adjusted free cash flow of $11 billion to $12 billion for the year. ...
19 hours ago
‘World first’: Google threatens to disable search in Australia over proposed new law

‘World first’: Google threatens to disable search in Australia over proposed new law

Google has been at odds with the Australian Government since the latter proposed the ‘world first’ law to make tech companies pay publis...
22 hours ago
FCC rejects petition to stay Ligado Network’s 5G rollout

FCC rejects petition to stay Ligado Network’s 5G rollout

The Federal Communications Commission rejected by a vote of 3-2 on Tuesday to freeze the rollout of Ligado Networks’ nationwide mobile bro...
2 days ago
Oil prices rise on hopes of big stimulus money

Oil prices rise on hopes of big stimulus money

The crude oil prices showed an upswing with Brentwood going up to $56.08 a barrel and the US West Texas Intermediate crude oil selling at $5...
2 days ago
Kia bags Apple Car production deal

Kia bags Apple Car production deal

Apple Inc.’s much-coveted Apple Car could be produced by Kia Corp. at the latter’s manufacturing facility in the United States. The Sout...
2 days ago