Senate leaders and White House officials just emerged from a marathon closed-door negotiation session with smiles on their faces. Both sides now fundamentally agree on a $2 trillion stimulus package aimed at boosting the American economy. Among the largesse is $50 billion for troubled U.S. airlines and potentially even more. Hotels and cruise lines are likely to benefit too.
The legislation will send $1,200 checks to many Americans (and $500 to children), provide expansive small business loans, fund hospitals and medical research, and help larger companies hit particularly hard by the COVID-19 virus, including airlines. All told, the rescue package nearly doubled in size to $2 trillion from its initial size of $1.2 trillion.
Per the Washington Post, a key White House concession means that the Senate will have far more scrutiny over how loans are distributed to private companies under this legislation. This scrutiny will come directly and also via an independent inspector general who will be appointed to carefully analyze how the money is spent. Of the $500 billion set aside for this purpose, $50 billion has been earmarked for passenger airlines and $8 billion for cargo airlines.
Although not directly mandated in the draft bill, President Trump has indicated he also wants aid to flow to hotels and cruise lines as well.
Airlines will no doubt applaud this news, but it isn’t clear yet what sort of strings Congress will attach to aid and whether such aid will flow exclusively in the form of loans or also grants. What is clear is that the Treasury Department, led by Secretary Steven Mnuchin, will not oversee the dispersement of these funds as originally planned.
Now the lobbying effort for airlines, hotels, and other hospitably companies truly begins, as each must convince Congress and the inspector general of their worthiness for a bailout. Expect quick, but contentious hearings and several conditions affixed to airlines aid, most centering on worker protection.
CONCLUSION
This story is developing as the Senate and House now embark upon final review of the bill ahead of a conference committee to iron out any final differences and a vote scheduled for Thursday. It looks like airlines will get the bailout after all…but there may be some extra strings attached.
Do airlines deserve this taxpayer bailout? Will it stave off an even greater calamity?
> Read More: Why I Oppose Bailouts For Airlines, Hotels, And Especially Boeing
Matthew,
The word you wanted was disbursement.
If this was Russia or china it would have been passed without discussion and we would be in jail if we protestrd. So, be glad you live in the US. where at least one party pretends it cares about you. The other one doesn’t even pretend that. It instead cares about businesses and relying on trickle down economics.
Self made men will be back to their swagger in no time with the help from the government.
So one party doesn’t care and the other doesn’t care but pretends to. To me, that latter party is more evil because they are doing two bad things instead of one.
Nice. By the way I wrote to both my representative and senator pointing out my concerns and they seem to have been addressed. Did you write to yours?
The impeachment trials had mostly foreign born US citizens testifying to Congress defying the white house mafia rules. The american born however wanting to keep their paychecks decided to prioritize fealty over patriotism.
Americans take their democracy for granted. And Republicans for most part are pathetic.
@ Matthew — This makes me sick.
Equity stakes so minor nationalization and conditions on layoffs.
I’m an airline pilot so obviously I have a bias here. I’m also certain that like any other bill rushed through this one has plenty of flaws and is loaded with pork that has zero to do with the virus. These are who we the people have elected and if we aren’t happy well then we the people should vote in politicians who actually have some integrity.
That being said I think its a good thing this passed and its all about jobs. The often quoted statistic is that airlines in this country employ some 750,000 people and indirectly support around 10 million jobs. Keeping those people working and getting pay checks is a worthwhile endeavor right now. There is also support for small business and money for individuals to help stimulate the economy. Its clear that we are going to need to stimulate the economy to keep people employed and aside from getting the health affects of COVID-19 under control trying to undo the damage done to our economy is the next most serious crisis we are facing at the moment.
Lastly don’t forget that much of this aid is in the form of loans which the government will make a profit on.
Early reports are there are significant strings attached to the money. No dividends. OK. Must keep 90% or more of employees until at least September. That is expensive. Another report said companies taking money must pay employees at least a $15/hour minimum wage forever and to any new employees. That means companies with highly skilled workers are not affected but companies with lower skilled workers are being punished (which could be hotels, restaurants, home health aides, etc.). Lots of politics are involved.
IF this is allowed to proceed, the airlines should refund all money to passengers that cancelled their flights due to COVID 19. The restrictions placed on customers by low cost airlines such as Allegiant or Frontier are such that vouchers given in place of refunds may not be able to be used depending on personal circumstance.
As it stands, if a customer cancels their flight based on COVID 19 concerns, the airline retains the money paid for the flight and also gets a substantial stimulus package? That is allowing the airlines to “double-dip” so to speak and yet may leave the customer losing a substantial amount of money if they are unable to use the voucher.