President Donald Trump late Tuesday again called for billions more in federal support for airline payrolls, hours after he halted talks with Democrats for a national stimulus package until after the election, sending stocks down sharply.
“The House & Senate should IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support,” Trump tweeted.
House Speaker Nancy Pelosi on Friday vowed more support for airlines but an attempt by a key House Democrat to get aid passed failed.
Last week American Airlines, United Airlines and other U.S. carriers began furloughing more than 32,000 workers. Airlines, struggling from weak demand during the pandemic and bleeding cash, agreed to not cut any jobs until Oct. 1 under the terms of $25 billion in federal payroll support passed in March.
But with demand hovering at one-third of last year’s levels, airline executives and labor unions spent the last few weeks pleading for more aid in Washington that would preserve jobs through March 2021. Their proposal won bipartisan support but has remained stuck, as Democrats in Congress and the Trump administration repeatedly failed to reach agreement on a national coronavirus package that could have included the airline aid.
There are already standalone bills for airlines in each the House or the Senate but it wasn’t immediately clear if they would advance instead of a broader aid package. Sen. Roger Wicker, R-Miss., who introduced a bill last month with Sen. Susan Collins, R-Maine, that calls for $28 billion in additional aid for airlines and contractors, is trying to find a way to move it forward, according to a person familiar with the matter.
Airlines that started furloughing their workers said they would reverse course if more aid was approved and the continued uncertainty leaves thousands of sector workers in limbo.
“Time already ran out for U.S. airlines and many of our employees, yet there is a glimmer of hope that our leaders in Washington will act and save these jobs before it’s too late to turn back the clock,” Airlines for America, a lobbying group that represents major U.S. airlines, said in a statement. “Some U.S. airlines may be able to reinstate employees if they receive direct payroll assistance from the federal government soon, but that becomes increasingly challenging with each passing day.”
Airline shares fell more than the broader market after Trump’s comments Tuesday afternoon that he was calling off talks for a coronavirus relief package until after the Nov. 3 vote, a move that would close off the main route to more aid airlines were pursuing.
American’s shares fell 4.5% to $12.53, while United’s closed at $34.88, down 3.7% on the day. Shares of Southwest Airlines, which asked its unionized employees on Monday to take pay cuts in order to avoid furloughs through the end of next year, fell 2.4% to $37.58. Delta Air Lines ended the day down nearly 3% at $31.06.
Boeing shares, already down on the day after the company issued a downbeat aircraft demand forecast, fell 6.8% on Tuesday to $159.54 after Trump’s announcement pausing stimulus talks.