The pandemic relief bill that President Biden signed Thursday afternoon will protect tens of thousands of aviation jobs, providing a lifeline for an industry that is likely to struggle for some time even as vaccinations accelerate.
After Congress this week approved the legislation, which includes $ 14 billion for airlines and an additional $ 9 billion for airports and other businesses, American Airlines and United Airlines told 27,000 employees they could ignore the notice of leave they had received in recent weeks. Airlines had issued the warnings, which are legally required ahead of the sweeping cuts, as they prepared to take the leave at the end of this month, when a first round of federal aid expired. The new bill extends this assistance until September.
“If you have one of those WARN Act notices that we sent out in February, tear it up,” Doug Parker, CEO of American, said in an Instagram video. “There will be no time off at American Airlines in April and, with the rise in vaccinations, I hope never again.”
The relief package, which Mr Biden says is necessary to protect the economy and workers and which many Republican lawmakers have criticized as excessive, is the third to provide funding to keep airline workers employed since. the start of the pandemic. Last March, Congress granted passenger airlines $ 25 billion in loans and an additional $ 25 billion in wage subsidies. He renewed payroll funding in December with an additional $ 15 billion and again this week.
Biden’s relief bill also sets aside $ 1 billion for aviation contractors and $ 8 billion for airports to help them operate normally, limit the spread of the virus, pay workers and to repay their debts. In return for the aid, airports, contractors and airlines are barred from major layoffs until September and have been forced to make further concessions.
The aviation and travel industry has been among the hardest hit by the pandemic. A year ago, passenger numbers began to drop as the virus spread widely and government officials restricted or discouraged travel. By early April, the number of people who fly each day had fallen 96% from the previous year.
Since then, travel has recovered somewhat. On average, around one million people per day were screened at airport security checkpoints over the past week, down about 46% from the same period in 2019, according to Transportation data. Security Administration.
Yet airlines collectively lose $ 150 million a day on average, according to Airlines for America, an association that represents American, United and the other major carriers. Widespread vaccine distribution has given the industry hope for a rebound, but airlines are expected to continue to lose money through the summer, and most industry analysts and executives are not sure. don’t expect travel to return to 2019 levels until 2023 or 2024.
In a report released Thursday, Fitch Ratings said it now expected a slower first-half air travel recovery in the United States and Canada than it had previously forecast. But the second half of the year could see a “pretty robust rebound,” Fitch analysts said, citing recent surveys that show many people are eager to travel once they feel safe.
“Fitch thinks it may not be necessary to achieve full herd immunity to at least start bouncing travel,” the analysts wrote. “On the contrary, a drop in death rates caused by vaccine coverage among vulnerable populations may be enough to ease restrictions on the pandemic and increase the comfort of travelers.”
In the meantime, airlines are doing what they can to get people to book tickets, set up direct flights to popular beach destinations, cut fares and promise strict enforcement of security procedures.
But obstacles remain. This week, the Centers for Disease Control and Prevention said people who had been fully vaccinated could safely engage in a wider range of activities than those who had not, including congregating in small groups at home without masks or social distancing. To the frustration of airlines and other industry leaders, the agency continued to recommend that everyone avoid travel.
Airlines have argued that there is a low risk of in-flight virus transmission due to high-end cabin ventilation systems, strict disinfection practices and stringent mask requirements. But travel has nonetheless facilitated the spread of the virus around the world.
“We know that after mass travel, after vacation, after vacation, we tend to see an increase in cases,” CDC director Dr. Rochelle Walensky said on MSNBC Monday night. “And so, we really want to make sure – again with only 10% of people vaccinated – that we limit travel.”
Widespread distribution of vaccines will not solve all of the industry’s problems either. It could be at least a year, if not much longer, before business and international travel, which tends to be much more profitable for airlines than leisure bookings, starts to bounce. Some people have speculated that business travel could be permanently reduced because salespeople and other professionals have become accustomed to video conferencing and have come to realize that many trips they made were a waste.