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A group of Senate Republicans yesterday backed extending a $25 billion payroll assistance program for U.S. airlines after warnings that carriers may be forced to cut tens of thousands of jobs without government action, Reuters reported. The letter, spearheaded by Sen. Cory Gardner (R-Colo.) and addressed to Senate Majority Leader Mitch McConnell (R-Ky.) and Senate Minority Leader Chuck Schumer (D-N.Y.) and copied to Treasury Secretary Steve Mnuchin, was the first public disclosure of significant support in the Republican-led Senate for additional emergency funding for U.S. airlines. A spokesman for McConnell declined to comment. Senators Marco Rubio (R-Fla.), Roger Wicker (R-Miss.), James Inhofe (R-Okla.), James Risch (R-Idaho), John Cornyn (R-Texas), Todd Young (R-Ind.), Susan Collins (R-Maine), Martha McSally (R-Ariz.), Shelley Moore Capito (R-W.Va.) and others who signed the letter said that they backed a new six-month extension of the $25 billion payroll support program “to avoid furloughs and further support those workers.”

Richard Branson’s Virgin Atlantic Airways Ltd. filed for chapter 15 bankruptcy protection in the U.S. yesterday after telling a London court it was set to run out of cash next month if a pending rescue deal isn’t approved, Bloomberg News reported. The airline filed its petition in the Southern District of New York. Chapter 15 allows foreign companies with U.S. assets to protect themselves against claims while they work on a turnaround plan at home. The company had said during proceedings in the U.K. that it planned to apply for the U.S. protection while it finalizes a rescue plan that’s already supported by a majority of its stakeholders. Virgin is seeking to secure a a 1.2 billion-pound ($1.6 billion) rescue, which was announced in July. Since Jan. 1, Virgin’s reservations are down 89 percent year-over-year and demand for the second half of 2020 is at approximately 25 percent of 2019 levels, according to court papers. Virgin’s restructuring plan in the U.K. depends on the approval of its chapter 15 filing in the U.S., the company said in its court filing. Without the plan, there’s uncertainty as to whether Virgin could get enough creditor support to implement its restructuring in time to avoid going into formal insolvency proceedings, according to the filing.

Aeromexico, Mexico’s largest airline, defaulted on interest payments for two debt issuances, a representative for the debt holders said yesterday, Reuters reported. Like other airlines, Aeromexico has been suffering from a drop in demand caused by the coronavirus pandemic. Late last month, the company said it had initiated chapter 11 bankruptcy proceedings. The default was for a total amount of 3 million Mexican pesos ($135,000), financial group CI Banco said in a statement sent to the Mexican stock exchange.

American Airlines said yesterday that it is sending 25,000 notices of potential furloughs to frontline workers and warned that demand for air travel is slowing again as COVID-19 cases increase and states re-establish quarantine restrictions, Reuters reported. The Worker Adjustment and Retraining Notification Act requires companies to provide 60 days’ notice of potential layoffs or furloughs. In a memo to employees released on Wednesday, American said the notices are tied to the overstaffing it expects in October when U.S. government payroll assistance expires. American, with more than 130,000 employees in 2019, had already warned that furloughs would be hard to avoid as pandemic-hit revenue remains more sluggish than the airline had hoped. Among different work groups, warnings are being sent to 2,500 pilots or about 18 percent of the total, nearly 10,000 flight attendants or 37 percent of the total, and 3,200 mechanics or 22 percent of the total. Overall, American expects to be overstaffed by about 20,000 in the fall, but hopes to reduce the actual number of furloughs through enhanced leave and early-departure programs it has rolled out alongside unions, Chief Executive Doug Parker and President Robert Isom said in the memo.

The U.S. Transportation Department said yesterday that U.S. airlines carried 89 percent fewer passengers in May compared with last year, a massive decline that is still better than a historic low in April amid the coronavirus pandemic, Reuters reported. The 20 largest U.S. airlines carried 7.9 million passengers in May down from 74.8 million passengers in May 2019. Still, the airlines carried more than twice as many passengers in May than in April, when passenger traffic fell 96 percent, up from 3 million passengers on all U.S. airlines in April. International U.S. traffic fell 98 percent in May to 182,000 passengers, down from 9.9 million.

Mexico’s Interjet said yesterday that it received a $150 million capital injection to help the company through a major restructuring in a bid to offset the crisis in the airline sector as the coronavirus pandemic choked global travel, Reuters reported. Interjet, one of Mexico’s three biggest airlines with a portfolio of more than 50 routes, announced restructure plans last month as local media speculated about the carrier’s financial health. The struggling Mexican airline said a group of investors, headed by businessmen Carlos Cabal and Alejandro del Valle, has injected capital to help shore up the company. Rival Aeromexico has already filed for chapter 11 bankruptcy proceedings.