Donald Trump has put the brakes on further COVID-19 relief talks. The President has told his negotiators, led by Treasury Secretary Steven Mnuchin, to suspend relief talks until after the November election. The decision will come as a blow to US airlines. They’ve been campaigning hard for further COVID-19 relief. Now, with talks and a decision pushed back, the prognosis for US airlines and hundreds of thousands of employees just got grimmer.
“I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hard-working Americans and small business,” said Mr Trump in a tweet earlier today.
Payroll support has ended and there’s no further relief in sight
The CARES Act had propped up the US airlines for many months. The Act provided payroll funding to US airlines to the tune of US$25 billion. That kept jobs in the airline industry safe, at least for a time. But that funding expired on October 1. In the leadup to that date, there were dire warnings of mass layoffs across the airline industry should further funding not eventuate.
As the deadline approached, airlines frantically scrambled to do deals with unions and Washington powerbrokers. But in the leadup to October 1, airline CEOs were cautiously optimistic further funding would be forthcoming.
“I spent two days last week meeting with White House and Congressional leaders,” said Southwest Airlines CEO, Gary Kelly, ten days ago.
“I have some good news and not so good news. Both sides of the political divide recognize that airlines are a critical part of the economy. There is very strong support from Congress and within the White House for extending the payroll support program. I feel more optimistic about our leaders reaching agreement on an aid package today than I did a week ago.”
Despite continuing talks, Republican Party negotiators led by Mr Mnuchin, and Democrat negotiators led by House Speaker Nancy Pelosi, were unable to reach consensus and do a deal.
The absence of a funding deals leaves employees and airlines in limbo
That’s left millions of workers, in the airline industry and elsewhere, facing an uncertain short-term future. With further talks and any decision now pushed back to November, that uncertainty increases.
Talking about the October 1 deadline, American Airlines CEO Doug Parker told Margaret Brennan on Face The Nation last week that many airline employees will lose their jobs unless further relief comes.
“Our plan actually is to get Congress and the administration to come together and get the COVID relief package passed that will include support and an extension of the payroll support program.
“There’s enormous bipartisan support for it. We have Republicans, Democrats, the administration all saying- knowing that this is the right program, that it makes sense.”
Mr Parker expressed hope that Mr Trump would issue an Executive Order in the absence of negotiators coming to a deal and legislation getting passed. The American Airlines CEO suggested a fast looming deadline might spur negotiations to a conclusion.
But a week has elapsed since then, and neither a deal nor Executive Order has eventuated. With the President now tweeting how great everything is going, his enthusiasm for an Executive Order may have waned.
Meanwhile, US airlines and their employees face an uncertain immediate future. While they’d like to see payroll support funding continue, a decision, either way, would at least provide some certainty. For the next month, at least, that’s not happening.