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The U.S. Treasury said yesterday that it had closed loans to seven large airlines hit hard by the coronavirus pandemic and urged Congress to save tens of thousands of airline jobs by extending billions in payroll assistance, Reuters reported. The Treasury said in a statement the seven carriers were Alaska Airlines, American Airlines, Frontier Airlines, JetBlue Airways Corp, Hawaiian Airlines, SkyWest Airlines and United Airlines. Airlines and unions were still heavily lobbying Congress ahead of a deadline today for a new $25 billion bailout to keep workers on the payroll for another six months, but industry officials acknowledge they face an uphill battle with just hours left. U.S. airlines received $25 billion in March under the CARES Act, primarily in the form of grants to keep employees on payroll through September and avoid furloughs. Treasury Secretary Steven Mnuchin urged Congress on Tuesday to extend the payroll assistance program “so we can continue to support aviation industry workers as our economy reopens and we continue on the path to recovery.” Last week, Mnuchin ruled out executive action to avert airline layoffs. House of Representatives Democrats have backed a $2.2 trillion measure that would provide assistance to many hard-hit sectors as well as direct relief for Americans. They have been reluctant to support a stand-alone measure that would only aid airline workers.

House Democrats released a scaled back $2.2 trillion proposal to extend support to the U.S. economy in face of the continuing damage from the coronavirus pandemic, Bloomberg News reported. The plan follows through on discussions last week to prompt a last-ditch attempt at negotiations with the White House and break an impasse on COVID-19 relief that’s lasted since early August. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin talked yesterday after the Democratic plan was released and plan to speak again today, Pelosi’s spokesman said. While the details of the legislative text adds clarity to the talks, the top-line spending level is no closer to that so far supported by Republicans. President Donald Trump has indicated he could support as much as $1.5 trillion in aid — still higher than the $650 billion put forth in a “skinny” aid package by Senate Republicans earlier this month. Should no deal be forthcoming, House Democrats have said they aim to proceed on their own in voting on the new plan, allowing the party’s candidates in the Nov. 3 elections to highlight a recent vote on coronavirus relief. The last vote was on the bigger, $3.4 trillion HEROES Act back in May. A key source of division has been Democrats’ push for large-scale aid to state and local authorities. The plan released yesterday has $436 billion for one year of assistance, less than a previous demand for $915 billion, which had triggered scorn among Trump administration officials who called it a bailout for poorly run states. The Democratic plan includes new aid for airlines, restaurants and small businesses that wasn’t in in the original package passed by the House in May, and it has more than double the amount for schools. 

More than 35,000 employees across the airline industry are set to be out of a job by Thursday due to the effects of the COVID-19 pandemic on travel, the Washington Post reported. It’s another devastating blow for an industry facing a crisis analysts say is already far worse than it experienced after the terrorist attacks of Sept. 11, 2001, and one that has already seen employment in air transportation decline by 100,000 jobs according to one measure. The employees facing furlough will be victims of the ongoing devastation the pandemic has inflicted on airlines, which have seen demand for travel drop precipitously since March, but also of a Congress that says it wants to protect their jobs with billions of dollars in aid and yet has been unable to reach agreement on a bill to do so. Lawmakers say they didn’t intend to create a precipice when they gave airlines an initial $25 billion in aid on the condition that they not lay off workers until October. Like many Americans, they expected the virus to be under control by now. Instead, it continues to spread and air travel is stuck at about 700,000 passengers a day, a third of its normal rate. Read more. 

In related news, American Airlines said on Friday that it has secured a $5.5 billion government loan and could tap up to $2 billion more in October depending on how the U.S. Treasury allocates extra funds under a $25 billion loan package for airlines, Reuters reported. Airlines have until Sept. 30 to decide whether to take the U.S. Treasury loans, which were authorized under the CARES Act coronavirus relief bill passed by Congress in March. American Airlines was originally allocated $4.75 billion, but carriers including Delta Air Lines and Southwest Airlines have already said they do not intend to take their share of the package, opening the door for the funds to be used by other airlines. Fort Worth, Texas-based American said it has already drawn down $550 million of the Treasury loan, which is backed by its loyalty program. The loans also require airlines to issue warrants and carry restrictions on executive compensation and buybacks. Among other carriers, United Airlines said last week it will tap the Treasury loans, but it was not clear whether the airline would only seek its $4.5 billion share or more. Read more. 

Impresa Aerospace LLC, a parts maker involved in the manufacture of Boeing Co.’s 737 MAX airliners, has filed for bankruptcy protection after losing revenue due to the aircraft’s grounding in the wake of two fatal crashes, WSJ Pro Bankruptcy reported. Boeing’s 737 MAX planes were grounded after crashes on takeoff in 2018 and 2019 killed everyone on board. The 737 MAX was a major source of revenue for the private-equity owned Impresa, which filed for chapter 11 protection Thursday in the U.S. Bankruptcy Court in Wilmington, Del. Private-equity firm Twin Haven Capital Partners LLC, Impresa’s majority owner and secured lender, plans to buy the company out of bankruptcy for $10 million, unless a better offer is made, according to court papers filed by Impresa Chief Executive Steven Loye. Like others in the aerospace industry, Gardena, Calif.-based Impresa had chased the coveted 737 MAX business, investing heavily in production ramp-up for parts for the aircraft, which Boeing planned to make in large numbers. Then, in October 2018, a 737 MAX crashed on takeoff from Jakarta, Indonesia, killing all 189 people on board. In March 2019, another 737 MAX crashed during takeoff from Addis Ababa, Ethiopia, with 157 people on board, all of whom perished. Regulators grounded the aircraft in early 2019, but Boeing continued to produce it throughout the year, expecting it to be returned to service. In December 2019, Boeing announced production would halt in January. Production didn’t resume until this summer, and then at only a fraction of previous levels as the Federal Aviation Administration weighs whether to lift the grounding order, Loye said.

United Airlines has agreed to delay the effective date of pilot furloughs until Oct. 30 while union members vote on a broader deal that would protect some 2,850 jobs for months longer, Reuters reported. However, pilots will not be paid during the month of October if that deal does not pass, according to a memorandum of understanding between United and the union representing its 13,000 pilots that was seen by Reuters. “Our pilots are voting right now on a tentative agreement that, if approved, would avoid all pilot furloughs for at least nine months,” United spokesman Frank Benenati said on Wednesday. He noted that the company continues to push for an extension of federal payroll support. If lawmakers fail to agree to extend $25 billion in payroll aid for airlines this month, tens of thousands of employees are set to be furloughed on Oct. 1. Delta Air Lines agreed with its pilots to delay furloughs until Nov. 1, the union said on Monday, but will continue to pay them in October even without an extension of $25 billion in payroll support for airlines.

The Trump administration is urging U.S. lawmakers to pass separate bills to aid airlines and other sectors, given failure to reach agreement on a broader package of stimulus funding, Reuters reported. The U.S. Congress has been deadlocked over another round of economic stimulus aimed at blunting the effects of the coronavirus pandemic that has now killed over 200,000 people in the U.S. U.S. airlines, facing a huge drop in demand due to virus-related lockdowns, on Tuesday mounted a last-ditch bid to persuade Congress to approve a new $25 billion bailout to help avert thousands of furloughs set to begin Oct. 1. Delta Air Lines has agreed to delay a decision on pilot furloughs until Nov. 1, the pilots union said on Tuesday. Two key Republican senators this week introduced a bill that would authorize $28.8 billion in payroll aid for the airlines. But congressional aides say a stand-alone measure is unlikely to win passage given aid requests from so many other struggling industries. White House Press Secretary Kayleigh McEnany said that talks about a broader stimulus measure were continuing with House of Representatives Speaker Nancy Pelosi, and said the White House’s agreement to accept a measure valued at $1.5 trillion could still lead to some progress. In the absence of a bigger bill, she urged Pelosi to work on separate legislation to address the needs of airlines, which have warned that they will be forced to carry out mass layoffs unless they receive additional assistance.

Avianca Holdings SA, one of Latin America’s largest airlines, lined up a $2 billion bankruptcy-loan package to finance its stay in chapter 11 from a group of investors and lenders including United Airlines Inc. and Chairman Roberto Kriete, WSJ Pro Bankruptcy reported. Since filing for bankruptcy in May after the coronavirus pandemic curtailed flying, Avianca has been working to raise capital to stay in business as air travel remains deeply depressed world-wide. With the loan proposal, the three large Latin American airlines pushed into bankruptcy by the pandemic — Avianca, Latam Airlines Group SA and Grupo Aeromexico SAB — have all found sources of private capital to weather the financial impact of COVID-19. Avianca is fast running out of cash, with its balance down to $150 million. The airline expects to remain in the red for at least eight more months, according to a court filing by Avianca’s investment banker John Luth. It resumed commercial flights Sept. 1. The loan package is backed by the company’s LifeMiles loyalty program, estimated to be valued at as much as $1.6 billion, as well as by its cargo business, according to Luth’s declaration.

Two key Republican senators on Monday introduced legislation that would authorize $28 billion in payroll assistance to avoid thousands of airline industry layoffs set to begin Oct. 1, Reuters reported. Sens. Roger Wicker, who chairs the Commerce Committee, and Susan Collins, who chairs the appropriations subcommittee overseeing airline issues, introduced the measure that would grant airlines a new bailout days before existing payroll support runs out. The bill would tap $11 billion in new funds and $17.4 billion in funding repurposed from other unspent funds from prior coronavirus relief measures.

U.S. House of Representatives Speaker Nancy Pelosi (D-Calif.) spoke on Friday with the chief executives of the country’s top airlines, who are urging Congress to approve another $25 billion in assistance to keep tens of thousands of U.S. workers on the payroll past Sept. 30, Reuters reported. The call with Pelosi, House Transportation Committee Chairman Peter DeFazio and the CEOs followed one with labor, where the speaker voiced support for additional aid, according to Association of Flight Attendants-CWA International President Sara Nelson. Airlines and unions are pleading for an extra six months of aid under a bipartisan proposal for another $1.5 trillion in coronavirus relief. The end of this month marks the expiration of the $25 billion in federal payroll assistance that airlines received when the coronavirus first began spreading around the world. Without an extension, United Airlines and American Airlines alone are set to furlough some 40,000 workers on Oct 1. American has also said that it plans to end service to 15 small communities, a move that could be followed by other airlines. President Donald Trump is also open to a stand-alone measure for airlines, though congressional aides say that is unlikely to win support given aid requests from so many other struggling industries. 

White House Chief of Staff Mark Meadows met with major airline chief executives yesterday as the industry braces for thousands of job cuts in two weeks, and urged lawmakers to embrace a $1.5 trillion coronavirus aid package proposed by a bipartisan congressional group and endorsed by President Donald Trump, Reuters reported. Meadows told reporters “if (House) Speaker (Nancy) Pelosi was willing to move a bill to keep people from being laid off in the airline industry that’s stand-alone, that the president would certainly support it.” But congressional aides say that it is unlikely that Congress would agree to a stand-alone bill to assist airlines when so many other sectors are struggling and seeking assistance. “The needs have only grown. Some of the needs for the small businesses, needs for restaurants, needs for transportation and the rest,” Pelosi said yesterday. Other transportation sectors are also seeking billions of dollars in new bailout funds, including public transit, bus companies and the Amtrak passenger rail service. Meadows said that the administration had examined executive action options, all of them less than ideal. Airlines did not offer a new proposal but again made the case that helping avert airline job cuts was one good reason to pass a broad coronavirus relief bill.