A massive coronavirus stimulus package passed by Congress includes $61 billion in funding and loans for airlines and the aviation industry, which could provide relief for Atlanta-based Delta Air Lines, the largest U.S. carrier by revenue.
The Senate approved the deal late Wednesday, followed by the U.S. House of Representatives approving the broader $2 trillion stimulus package Friday.
The legislation has $29 billion in funding for airlines, including $25 billion for passenger carriers and $4 billion for cargo airlines. Sandy Springs-based UPS also operates a major air cargo carrier. Another $3 billion is allocated for aviation contractors.
Airlines had pushed for a federal bailout by promising not to furlough employees for a certain period of time, pledging to limit executive compensation and eliminate stock buybacks and dividends for the life of the loans.
Delta Air Lines CEO Ed Bastian issued a statement Friday thanking Congress and the administration, saying: “The aid provided in this government assistance package will go to directly support airline workers who will in turn help reignite the U.S. economy. We are committed to serving our people, our customers and our communities through this difficult period, and look forward to leading the recovery when we are past the crisis.”
Bastian added in a memo to employees, however: “While this assistance is welcome, it’s important to remember that the relief package is not a cure for the unprecedented challenges we face. It is one of several steps that we have outlined over the past two weeks designed to protect jobs and our airline.”
Delta said last week it was cutting 70% of flights and parking at least half of its fleet. More than 21,000 Delta employees have volunteered to take unpaid leave, and the company has reduced many employees’ pay by 25% and cut hundreds of contractor jobs.
The bill’s conditions restrict airlines from cutting workers’ pay or benefits or conducting involuntary furloughs of workers through Sept. 30.
Airlines could be required to maintain certain flights serving small and remote communities or heath care supply chains, and the bill says the federal government could receive a stake in airlines as compensation for assistance.
Joe DePete, president of the Air Line Pilots Association union representing pilots at Delta and other carriers, issued a statement saying pilots “applaud the fact that the economic relief package contains provisions to limit furloughs, protect our contracts, and ensure that federal assistance is used to pay airline employees’ salaries and benefits, not executive compensation or corporate stock buybacks.”
The stimulus package also includes loans and loan guarantees — $25 billion for passenger airlines and $4 billion for cargo carriers — though airlines would qualify for the loans if they can’t get credit otherwise.
And it includes $10 billion in assistance for airports.
Airline relief is expected to have a significant impact in Atlanta and Georgia, which both depend on air travel for revenue and jobs.
Delta, the dominant airline at Atlanta’s Hartsfield-Jackson International, has about 90,000 employees worldwide, including more than 36,000 in Georgia. That doesn’t include tens of thousands of contract workers.
Hartsfield-Jackson, the world’s busiest airport, has more than 63,000 workers. That includes airline and airport employees, concessions workers, contractors and others. The Atlanta airport says it has an $82 billion economic impact on the region.
The U.S. airline industry has been reeling for weeks as would-be travelers stay home amid the coronavirus pandemic.
Delta said is taking out billions in loans and minimizing gate usage on multiple concourses.
Traffic at Hartsfield-Jackson has declined as much as 85%, and multiple TSA checkpoints and concessions have closed. Some concessions have laid off workers.
Some opposed an airline bailout without restrictions on how the money is used. Consumer groups pushed for consumer protections, unions want worker protections, and others have pressed for new environmental measures.
Like the broader stock market, Delta shares rallied as legislators neared bailout votes. Delta shares were trading at more than $30 early Friday afternoon, down about 4%.
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