The pandemic relief law, signed by President Biden Thursday afternoon, will protect tens of thousands of aviation jobs and provide a lifeline to an industry that is likely to struggle for some time, even if vaccinations accelerate.
After Congress passed legislation this week that includes $ 14 billion for airlines and an additional $ 9 billion for airports and other businesses, American Airlines and United Airlines announced 27,000 employees that they had read the vacation notices they were in the past few weeks could ignore. The airlines had issued the warnings required by law of sweeping cuts as they prepared to run the vacation days late this month as an earlier round of federal aid came to an end. The new bill extends this support until September.
“If you have any of those WARN Act notices that we sent out in February, rip it up,” said Doug Parker, American chief executive, in an Instagram video. “With American Airlines there will be no vacation days in April, and hopefully never again with increasing vaccinations.”
The rescue package, which Mr Biden said was necessary to protect the economy and workers, and which many Republican lawmakers have criticized as excessive, is the third to provide funding to help airline workers since the pandemic began employ. In March of last year, Congress provided $ 25 billion in loans to passenger airlines and an additional $ 25 billion in payroll. Payroll was renewed for an additional $ 15 billion in December and renewed again this week.
The Biden Aid Act also provides $ 1 billion for air carriers and $ 8 billion for airports to help them function normally, limit the spread of the virus, pay workers, and service their debts. In return for the aid, airports, contractors and airlines will not be allowed to make major layoffs until September and have had to make other concessions.
The aviation and travel industries have been hardest hit by the pandemic. A year ago, the number of people flying began to decline as the virus spread widespread and government officials restricted or prevented travel. By the beginning of April, the number of people flying daily had fallen by 96 percent compared to the previous year.
Travel has recovered somewhat since then. According to the Transportation Security Administration, an average of around one million people per day were screened at airport security checks over the past week, a decrease of around 46 percent compared to the same period in 2019.
Airlines for America, an association representing American, United, and the other major airlines, say airlines lose an average of $ 150 million a day overall. The widespread use of vaccines has given the industry hope for a rebound, but airlines are expected to continue losing money over the summer and most industry analysts and executives don’t expect travel expenses to reach the levels of by 2023 or 2024 2019 will recover.
In a report on Thursday, Fitch Ratings said the U.S. and Canada are expected to see a slower recovery in air travel in the first half of the year than previously forecast. However, there could be a “fairly robust recovery” in the second half of the year, according to Fitch analysts. They cited recent surveys that showed that many people like to travel when they feel safe.
“Fitch believes that achieving full herd immunity may not be necessary to at least get a boost in travel,” the analysts wrote. “Rather, a drop in death rates triggered by vaccine supplies to vulnerable populations may be enough to ease pandemic restrictions and make travelers more comfortable.”
Frequently asked questions about the new stimulus package
How high are the business stimulus payments in the bill and who is entitled?
The 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 the full $ 1,400, a single person would need an adjusted gross income of $ 75,000 or less. For householders, the adjusted gross income should be $ 112,500 or less, and for married couples filing together, that number should be $ 150,000 or less. To be eligible for a payment, an individual must have a social security number. Continue reading.
What Would the Relief Bill do for Health Insurance?
Buying insurance through the government program known as COBRA would temporarily become much cheaper. Under the Consolidated Omnibus Budget Reconciliation Act, COBRA generally lets someone who loses a job purchase coverage through their previous employer. But it’s expensive: under normal circumstances, a person must pay at least 102 percent of the cost of the premium. Under the relief bill, the government would pay the full COBRA premium from April 1 to September 30. An individual who qualified for new employer-based health insurance elsewhere before September 30th would lose their eligibility for free coverage. And someone who left a job voluntarily would also be ineligible. Continue reading
What would the child and dependent care tax credit bill change?
This loan, which helps working families offset the cost of looking after children under the age of 13 and other dependents, would be significantly extended for a single year. More people would be eligible and many recipients would get a longer break. The bill would also fully refund the balance, which means you could collect the money as a refund even if your tax bill were zero. “This will be helpful for people on the lower end of the income spectrum,” said Mark Luscombe, chief federal tax analyst at Wolters Kluwer Tax & Accounting. Continue reading.
What changes to the student loan are included in the invoice?
There would be a big one for people who are already in debt. You wouldn’t have to pay income taxes on debt relief if you qualify for loan origination or cancellation – for example, if you’ve been on an income-based repayment plan for the required number of years, if your school cheated on you, or if Congress or the President whisper $ 10,000 debt gone for a large number of people. This would be the case for debts canceled between January 1, 2021 and the end of 2025. Read more.
What would the bill do to help people with housing?
The bill would provide billions of dollars in rental and utility benefits to people who are struggling and at risk of being evicted from their homes. About $ 27 billion would be used for emergency rentals. The vast majority of these would replenish what is known as the Coronavirus Relief Fund, created by CARES law and distributed through state, local, and tribal governments, according to the National Low Income Housing Coalition. This is on top of the $ 25 billion provided by the aid package passed in December. In order to receive financial support that could be used for rent, utilities and other housing costs, households would have to meet various conditions. Household income cannot exceed 80 percent of area median income, at least one household member must be at risk of homelessness or residential instability, and individuals would be at risk due to the pandemic. According to the National Low Income Housing Coalition, assistance could be granted for up to 18 months. Lower-income families who have been unemployed for three months or more would be given priority for support. Continue reading.
In the meantime, airlines are doing everything they can to get people to book tickets, set up direct flights to popular beach destinations, cut fares, and promise to strictly enforce security procedures.
But obstacles remain. This week, the Centers for Disease Control and Prevention said people who were fully vaccinated could safely do a wider range of activities than those who hadn’t, including meeting in small groups at home without masks or social distancing . To the frustration of airlines and other industry executives, the agency continued to recommend everyone avoid travel.
The airlines have argued that the risk of virus transmission in flight is low due to high quality cabin ventilation systems, strict disinfection practices and strict mask requirements. Even so, traveling has made it easier for the virus to spread around the world.
“We know that after mass travel, after vacation, after vacation, there is an increase in some cases,” said CDC Director Dr. Rochelle Walensky on Monday night on MSNBC. “And so we really want to make sure that we – again with only 10 percent of the vaccinated people – limit travel.”
The widespread use of vaccines will not solve all of the industry’s problems either. It could take at least another year, if not much longer, for business travel and international travel, which tend to be much more profitable for airlines than leisure bookings, to recover. Some people have speculated that business travel could be reduced permanently as salespeople and other professionals got used to video conferencing and found that many of the trips they used to take were wasteful.