House Speaker Nancy Pelosi, D-Calif., called off talks for a standalone airline relief bill Thursday, dashing hopes that a narrow measure to support the airline industry could continue after President Donald Trump abruptly shot down overall stimulus talks earlier this week.
“There is no standalone bill without a bigger bill. There's no bill,” the speaker said during her weekly press conference.
Pelosi and Treasury Secretary Steven Mnuchin have had several daily phone calls this week to discuss the viability of a standalone airline relief bill, but after barring his surrogates from holding any more stimulus negotiations, Trump tweeted that "The House & Senate should IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support."
It was not clear what the gap was between the two sides, but a Democratic measure put up for vote last Friday was opposed by Republicans and failed to pass. Republicans wanted details on how it would be paid for, a GOP aide said, pointing to a version of the bill introduced by Republicans that included an appropriation from Treasury and tapping unused CARES Act funds, while the Democratic measure didn’t include spending offsets.
Legacy carriers began furloughing tens of thousands of airline employees last Thursday when a key deadline expired. After taking $25 billion in Payroll Support Program funding authorized under the CARES act, the airlines weren’t allowed to furlough any employees until Oct 1, which assumed that the U.S. would have the coronavirus under control. However, travel demand remains at historic lows and airlines continue to burn through millions of dollars each day.
Airline executives have been lobbying for months for additional funding, saying that without the extra relief they will have no choice but to continue furloughs and cutbacks.
"We can’t continue to wait. If forced to, of course, we will indeed discontinue service to a lot of markets and we will be much slower to rebound and help the country rebound from this pandemic,” American Airlines CEO Doug Parker told CNBC Thursday, in reaction to talks being called off.
On Wednesday, the airline suspended service to 11 markets for October and November due to lack of resolution over the Payroll Support Program extension, American Airlines spokesperson Stacy Day said in an email.
The process to “crew up” a plane after furloughs can take months, Dennis Tajer of the Allied Pilots Association told CNBC, because of industry and safety requirements.
"Workers just need help now. Working families don’t care what type of envelope their relief arrives in.”
Airline workers expressed dismay and disappointment over the failed talks that would endanger financial security for their essential worker colleagues and their families.
“It shows the hypocrisy of the political elites who claim to represent hard-working Americans," said Marc Himelhoch, a pilot for a major American airline who asked his employer not be identified because he was not authorized to speak on their behalf. "Here they have an opportunity to provide relief for hundreds of thousands of families who are about to be furloughed through no fault of their own. Airline relief has bipartisan support, yet they refuse to compromise.”
Labor unions reiterated their push for bipartisan airline relief whether standalone or part of a broader package. "Workers just need help now," Machinists Union Transportation Department Chief of Staff Joseph Tiberi said in an emailed statement. "Working families don’t care what type of envelope their relief arrives in.”
Industry experts say the damage from the failed talks will depend on how long the political standoff lasts.
“Meanwhile, demand is impaired, furloughees remain furloughed, and service has been cut,” independent aviation analyst Bob Mann said in an email.
The longer the fight drags on, the harder it will be to get America flying again, due to safety and training prerequisites that will slow a return to normal.
“As the pandemic and legislative standoff drag on, and the industry spools down from flight idle to a hard stop, there will come a point where retraining requirements after recalls will make it more difficult logistically as well as more expensive to get the industry back to the flight levels,” Mann said.
Parker said the request for funds wasn't just about a bailout but that without the funds some companies slowly bringing back employees to work will be stymied by delayed and reduced service from furloughs.
"This is about keeping critical infrastructure afloat for our country to bring it out of this pandemic,” he said.