The pandemic relief bill that President Biden signed on Thursday afternoon will protect tens of thousands of aviation jobs by providing a lifeline for an industry that is likely to struggle for some time, even as vaccinations increase. .
After Congress passed legislation this week, which includes $ 14 billion for airlines and an additional $ 9 billion for airports and other companies, American Airlines and United Airlines told 27,000 employees they could ignore the slack notices that received in the past few weeks. The airlines issued the notices, which are legally required before the radical cuts, as they prepared to grant licenses later this month, when an earlier round of federal aid expired. The new bill extends this assistance until September.
“If you have one of those WARN Act notices that we sent out in February, tear it up,” said Doug Parker, American chief executive, in a video on Instagram. “There will be no license on American Airlines in April, and with the increase in vaccinations, I hope it will never again.”
The aid package, which Biden said was necessary to protect the economy and workers and which many Republican lawmakers criticized as excessive, is the third to provide funding to keep airline workers employed since the start of the pandemic. Last March, Congress awarded passenger airlines $ 25 billion in loans and another $ 25 billion in payroll donations. He renewed payroll financing in December with another $ 15 billion and again this week.
The Biden relief bill also sets aside $ 1 billion for aviation contractors and $ 8 billion for airports to help them operate normally, limit the spread of the virus and pay workers and pay their debts. In exchange for aid, airports, contractors and airlines are prohibited from making major layoffs until September and have been forced to make further concessions.
The aviation and travel industry is among the hardest hit by the pandemic. A year ago, the number of people flying began to drop as the virus spread widely and government officials restricted or discouraged travel. By the beginning of April, the number of people flying every day had dropped 96% from the previous year.
The trips have recovered a little since then. An average of about one million people a day were screened at airport security checkpoints last week, a drop of about 46 percent from the same period in 2019, according to data from the Security Administration. Transport.
Still, airlines are losing an average of $ 150 million a day together, according to Airlines for America, an association representing American, United and other major airlines. The widespread distribution of vaccines has given the industry hope for a recovery, but airlines are expected to continue to lose money over the summer, and most industry analysts and executives do not expect travel to recover to 2019 levels by 2023 or 2024 .
In a report released on Thursday, Fitch Ratings said it now expects a slower recovery in air travel in the first half of the year in the United States and Canada than the previous forecast. But the second half of the year may have a “fairly robust recovery,” said Fitch analysts, citing recent surveys that show that many people are eager to travel when they feel safe.
“Fitch believes that achieving full herd immunity may not be necessary to at least start driving a recovery in travel,” wrote the analysts. “Instead, a decline in mortality rates spurred by vaccine coverage among vulnerable populations may be sufficient to loosen restrictions on the pandemic and build traveler’s comfort.”
Frequently asked questions about the new stimulus package
Stimulus payments would be $ 1,400 for most recipients. Those who are eligible would also receive an identical payment for each of their children. To qualify for a total of $ 1,400, a single person would need an adjusted gross income of $ 75,000 or less. For heads of household, the adjusted gross income must be $ 112,500 or less, and for couples filing jointly, that number must be $ 150,000 or less. To be eligible for a payment, a person must have a Social Security number. See More information.
Buying insurance through the government program known as COBRA would temporarily be much cheaper. COBRA, for the Consolidated Omnibus Budget Reconciliation Act, generally allows someone who loses a job to purchase coverage from the former employer. But it is expensive: under normal circumstances, a person may have to pay at least 102% of the cost of the premium. According to the relief bill, the government would pay the entire COBRA premium from April 1 to September 30. A person who qualifies for new employer-based health insurance elsewhere before September 30 would lose eligibility for free coverage. And someone who quit their job voluntarily would also not be eligible. Read More
This credit, which helps working families to offset the cost of caring for children under 13 and other dependents, would be significantly expanded over a single year. More people would be eligible and many recipients would have a greater chance. The invoice would also make the credit fully refundable, which means that you could charge the money as a refund, even if your invoice was zero. “This will be useful for people at the bottom end” of the income scale, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting. See More information.
There would be a big problem for those who already have debts. You would not have to pay income tax on forgiven debts if you qualify for loan forgiveness or cancellation – for example, if you have been on an income-based repayment plan for the required number of years, if your school has defrauded you or if O Congress or the president wipe $ 10,000 off the debt of a large number of people. This would be the case for debts forgiven between January 1, 2021 and the end of 2025. Read more.
The project would provide billions of dollars in rent and public service assistance to people who are struggling and at risk of being evicted from their homes. About $ 27 billion would go to emergency rental assistance. The vast majority would replenish the so-called Coronavirus Relief Fund, created by the CARES Act and distributed by state, local and tribal governments, according to the National Low Income Housing Coalition. That adds to the $ 25 billion in assistance provided by the aid package approved in December. To receive financial assistance – which could be used for rent, utilities and other housing expenses – families would have to meet several conditions. Family income cannot exceed 80 percent of the area’s average income, at least one family member must be at risk of homelessness or housing instability, and individuals would have to qualify for unemployment benefits or have experienced difficulties (directly or indirectly) because of the pandemic. Assistance can be provided for up to 18 months, according to the National Low Income Housing Coalition. Low-income families who have been unemployed for three months or more would have priority for assistance. See More information.
Meanwhile, airlines are doing what they can to get people to book tickets, establishing direct flights to popular beach destinations, cutting fares and promising strict enforcement of security procedures.
But the obstacles remain. This week, the Centers for Disease Control and Prevention said that people who have been fully vaccinated can safely engage in a wider range of activities than those who have not, including meeting in small groups at home, without masks or social detachment. To the frustration of airlines and other industry executives, the agency continued to recommend that everyone avoid travel.
Airlines argue that there is a low risk of virus transmission during flight because of state-of-the-art cabin ventilation systems, strong disinfection practices and strict mask requirements. Even so, travel facilitated the spread of the virus around the world.
“We know that after mass travel, after holidays, after holidays, we tend to see an increase in cases,” said CDC director Dr. Rochelle Walensky on Monday night on MSNBC. “And so, we really want to make sure – again with just 10 percent of people vaccinated – that we are limiting travel.”
The wide distribution of vaccines will also not solve all the problems in the industry. It may take at least another year, if not more, before corporate and international travel, which tends to be much more profitable for airlines than leisure bookings, begins to recover. Some people speculated that business travel could be reduced permanently because salespeople and other professionals got used to videoconferencing and realized that many trips they made were wasteful.