Outlook for US airlines remains cloudy despite further $15b aid injection

Congress looks poised to extend another $15b in aid to beleaguered US airlines — a reprieve for employees, but one that raises questions about the industry’s final destination. Not for the first time, airlines had threatened to furlough tens of thousands of staff when conditions attached to earlier rounds of bailout funds expire at the end of this month. American and United alone had put 27,000 employees on notice that it might stop paying them on April 1. While some aspects of President Joe Biden’s $1.9tn economic stimulus package have attracted political controversy, the extension of the airlines’ Payroll Support Program is not one of them. The new money — $14b for airlines and $1b for their contractors — will take the total earmarked for the industry to $63b. But the PSP, which bars airlines from furloughing employees or cutting pay, was created in March 2020 to see the airlines through a sharp liquidity crisis when it was assumed the coronavirus pandemic would last only months. A year on, US passenger traffic remains at a third of 2019 levels and the IATA forecasts a full recovery globally only in 2024. It is unclear when big US airlines will be able to support their current payrolls without subsidies.<br/>