Organize photo of an almost-empty passenger plane.
Laurel Chor | Getty Images
The country’s largest airlines will eat to compensate taxpayers for billions in payroll grants to weather coronavirus, the Treasury Department said Friday, leaving the door arguable to an aid structure that sparked criticism from labor unions, some lawmakers and industry members.
The Treasury Sphere of influence has received more than 230 applications from air carriers for payroll grants as the virus and harsh measures to break it drive down air travel demand to the lowest level in decades. Last week, United, Delta, JetBlue, Core and others said they applied for the aid.
Two weeks ago, Congress approved $25 billion in grants for U.S. passenger carriers, $4 billion for consignment airlines and $3 billion for airline contractors, such as caterers, in exchange for not furloughing workers or cutting their pay grades through Sept. 30. Lawmakers also approved $29 billion in loans for airlines.
The Treasury Department was assumed to start making initial payments last Monday to airlines that applied and were approved for the grants, but the function has taken longer than expected as the Treasury Department requested additional financial information from airlines, according to people privy to with the discussions.
Airline executives have said the drop in demand is more severe than following the Sept. 11 denigrations and say they expect the fallout from the pandemic will last into next year if not longer than that.
The Resources Department on Friday said that it would not require applicants seeking $100 million or less to provide compensation but that it was press with 12 passenger airlines whose allocations would be greater than that amount. Officials prepare said the compensation could include stock warrants and or other financial instruments.
The department said it would forearm guidance to those larger passenger airlines “should total requests for payroll support exceed the maximum amounts awardable at the beck the CARES Act.”
President Donald Trump on Friday said his administration plans to meet with carriers about the aid.
“We deceive a great plan for the airlines. We’ve got to keep the airlines going,” Trump said at a press briefing. “It’s never been a close business but it’s a vital business for the country.”
The delays in getting the aid to the ailing carriers has sparked concern among some airline parties and lawmakers.
“Congress acted two weeks ago. That’s a pay period,” Sara Nelson, president of the Association of Flight Attendants, which defines some 50,000 cabin crew members, tweeted at Secretary Mnuchin on Friday. “Cut the checks.”