U.S. to Take Stake in Airlines in Exchange for Cash Infusion as Part of Stimulus Bill

By Kurt Stolz on 26 March 2020
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The U.S. airline industry, which has seen passenger traffic plummet by almost 90%, is included in the $2 trillion economic stimulus bill that will provide payments to taxpayers, business bailouts, and unemployment benefits.

The plan passed by the U.S. Senate late Wednesday includes funding for struggling airlines, with part coming as grants to cover employee costs in exchange for giving the government an ownership stake.

The airline industry had said it would be forced to layoff workers if it did not receive a government bailout.

“We are especially glad that this robust package to immediately stabilize the industry includes grants for worker payroll as well as protections for the integrity of collective bargaining agreements,” said Joe DePete, president of the Air Lines Pilots Association, which represents 63,000 pilots at 35 U.S. and Canadian airlines, in a statement.

The legislation, which still needs to be passed by the House of Representatives and signed by President Trump, includes $61 billion for the airline industry, with half in the form of loans and half in cash that would support salaries and benefits in exchange for equity.

The bill includes restrictions on executive compensation and furloughs.

Passenger airlines would receive up to $25 billion to cover payroll, while cargo airlines would see $4 billion, with a similar amount in loans.  The bill also allots $3 billion for airline contractors including caterers and ground support staff.

(Photo: Accura Media Group)

Accura News

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