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Why Congress Has To Act Quickly On Payroll Support

Last week marked an historic turning point in the airline sector’s battle with Covid-19, as a bipartisan group of Senators brought forward a $908 billion Covid relief proposal, including $17 billion for airline payroll support. The proposal was backed by Treasury Secretary Steve Mnuchin, who called the package “very meaningful in terms of employment and saving the industry”.

With more than 32,000 airline workers currently on furlough, “very meaningful” might just be the biggest understatement of the pandemic so far. However, as heartening as this news is there still remains a lot of work to be done in getting the money into the pockets of the people who need it most. Neither Congress nor the White House have approved the proposal yet; meanwhile 100,000 airline workers have missed paychecks.

To make matters worse more furloughs are anticipated, with Southwest planning to suspend 7,000 employees – the first layoffs in the company’s 50-year history. And it’s not just airlines who are feeling the pinch: 40% of public transport workers are expected to be made redundant by January. Come Christmas, 12 million Americans will lose their access to unemployment benefits, many of them will be transport workers too.

“I think that would be very meaningful in terms of employment and saving the industry,” - Steve Mnuchin

It’s been two months since payroll support officially ended and the situation for airlines remains dire. Traffic is still down 60% and the companies themselves have lost over $36bn this year so far. But there is light at the end of the tunnel. Travellers are slowly beginning to return, with Thanksgiving weekend marking the busiest period for airports so far this year. Last week Delta Airlines CEO Ed Bastian said news of the vaccine meant the company expected to be breaking even again by Spring. This is not a dying industry but one in need of quick, short term intervention if it is ever to regain its full strength.

The arguments against a second bailout have largely disappeared in the wake of the vaccine news and the slow return of international travel. It is now a matter of keeping Americans employed in order to kickstart the country’s economic recovery.

Support for airlines will be crucial to this, the airline supports some 6.5 million jobs. But wider support for the transport sector will also be vital if we are ever going to get people back to work. Last Week Washington DC subway system said it planned to end weekend train services and cut one-third of bus routes in mid 2021 without government help. New York has similarly threatened to ax 40% of subway and bus services. How can we have a hope of returning to life as normal if people won’t even be able to get into their offices once they open?

Overall the senate relief bill promises $45 billion in transport assistance. That’s $45 billion which allows Americans to go back to work; go on vacation; hug their loved ones for the first time in almost a year. It also includes provisions to keep airlines fully staffed and ready for a vaccine rollout, which could be approved any day now. The transport sector is vital to leading us out of the worst aspects of this pandemic and so it is critical that Congress approve the measures it needs to keep moving.

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