On December 27, 2020, the US president Donald Trump signed the $900 billion stimulus package that would provide US airlines with a $15 billion state aid.
The $15 billion would help US airlines to recall furloughed workers and pay the employee wages and benefits. The air carriers eligible for the state aid must agree to avoid layoffs or reduced pay rates until March 31, 2021. This would allow the return of more than 32,000 workers who were furloughed in October 2020.
Trump said in a statement that he was signing the bill “to restore unemployment benefits” and “return our airline workers back to work.”
The US Congress agreed on the relief bill on December 20, 2020. The final approval of the bill was expected to be achieved on December 21, 2020. However, the president criticized the bill thus delaying the approval.
Southwest Airlines (LUV) was planning on furloughing 6,828 employees in the spring of 2021, which would have been a first in the company’s 50-year history. Since the stimulus bill was signed, airline’s CEO Gary Kelly said the company won’t likely need to force any employee cuts for the entirety of 2021. “Given this, we currently do not anticipate the need to conduct any furloughs or pay cuts next year,” Kelly announced in a letter to workers.
United said it would recall its 13,000 furloughed workers, but according to the company’s CEO Scott Kirby those callbacks would be “temporary” due to a low demand.
Airlines previously received $25 billion under the CARES Act in March 2020. The aid helped them to pay staff and avoid job cuts until October 2020.
In November 2020, the International Air Transport Association (IATA) reported that North American carriers saw a 91.3% traffic decline in September 2020. North American airlines have lost more than $36 billion in 2020.
