US House Committee approves third airline bailout package

The US House of Representatives’ Financial Services Committee has approved a third payroll support package to the aviation industry, which would extend USD14 billion in wage assistance to airlines. The package will enter into effect once the current payroll support programme expires on March 31, 2021. It will prolong the support scheme through September 30, 2021, banning airlines from involuntarily furloughing staff in return for state subsidies. While a house committee vote is often seen as a crucial step for any forthcoming US legislation, the extension of the payroll support programme has yet to be approved by both chambers of Congress as well as President Joe Biden. If approved, it would become a part of a larger USD1.9 trillion state aid package. It is due to be voted on by the end of February. The airline payroll support programme was not a part of Biden’s original plan and was added to the package by the chairwoman of the committee, Maxine Waters. Congress is now acting ahead of schedule, after the previous extension of payroll support was only voted into law in late December 2020, nearly two months after the original scheme expired. Ultimately, airlines receiving support were ordered to recall all employees furloughed or laid off during that two-month period which saw heated disputes erupt between airlines, unions, and lawmakers. The PSP was originally adopted in March 2020 and entailed USD25 billion in assistance to passenger airlines. The December 2020 extension awarded a further USD16 billion. Multiple carriers had already warned that without a further extension of the PSP, they would have been forced to furlough and lay off potentially thousands of employees starting in April 2021.