Democratic U.S. lawmakers on Monday put forward the struggles regarding U.S. airlines and contractors $40 billion on a cash basis that need not be paid back but require significant new environmental and other conditions. The U.S. House of Representatives bill, which provides $2.5 trillion in stimulus and assistance to the U.S. economy in the face of the coronavirus outbreak, would award $37 billion in grants to airlines and $3 billion in grants to employees of ground-support and catering contractors.
Airlines could also receive $21 billion in loans that would be at 0% financing for the first year.
Airlines for America, a trade group representing major airlines, told Congress in a term sheet on Monday seen by news services that if passenger and cargo carriers got $29 billion in grants, it would permit us to save hundreds and thousands of jobs and preserve function to every community currently served in the United States for a specific period.
The term sheet said that if Congress added specific conditions to the government loans, it could provide the loans which are not used because the process contributed to the businesses via U.S. bankruptcy law was more attractive.
Republicans and Democrats were still struggling on Monday to reach the agreement on a far-reaching coronavirus indefinite occurrence, including the airline aid, after failing to reach a deal over this weekend.
Republicans have opposed providing bailouts to the passenger and cargo carriers, proposing help in the form of $58 billion in loans and saying the government could demand stock, options, or other equity as part of those loans.
The House bill would also set aside $1 billion to eliminate high-polluting airplanes. It would cap chief executive pay at no more than 50 times the median salary of employees and bar stock buybacks
It would also require that “no additional aircraft heavy maintenance work is outsourced to repair stations abroad” and require airlines to have a labor union-designated director.
Airlines would have to maintain “at least $15 minimum wage for all employees or contracted workers.”
Airlines receiving assistance would need to fully offset their carbon emissions starting in 2025 and reduce carbon emissions by 25% by 2035 and by 50% by 2050. They would also be required to tell customers the number of carbon emissions attributed to their flights.
Airlines made a plea over the weekend that $29 billion of $58 billion sought in assistance be in the form of cash grants. In return, they offered to make no job cuts through Aug. 31 and to accept curbs on executive pay and forgo paying dividends or stock buybacks.
Airlines, including United Airlines Holdings Inc UAL.N, have also said they are encouraging employees to apply for voluntary unpaid leaves of absence, among other measures aimed at saving costs.
Globally, the number of scheduled flights last week was down more than 12% from a year ago, flight data provider OAG said, and many airlines have announced further cuts to come as demand continues to drop.
Southwest Airlines Co (LUV.N) became the latest U.S. airline to slash its capacity by about 25% on Sunday, bringing forward and increasing cancellations that were initially due to run between April 14 and June 5. The cancellations include the suspension of all international flying until May 4, it said.