However the President won’t want to see mass layoffs one month before the election when CARES Act payroll subsidies expire and airline lobbyists have begun to suggest the idea of a second round of funding.
The argument that won politically the first time was saving jobs, but job cuts are actually coming by mid-July even though workers have to be paid through September, and airlines didn’t exactly play fair with use of funds from the first bailout.
Nonetheless, Transportation Secretary Elaine Chao isn’t ruling out another bailout and says it’s something to discuss and consider in the fall, if airlines need one.
“Let’s see what happens when most of the money is” distributed, Chao said, noting that “drawdown” has not yet occurred for much of the funds that have been allocated. “I think for most entities, the time when they will be rethinking about the need for additional cash, will not come about until September, October.”
The aviation industry has signaled that furloughs or layoffs may be imminent after Sept. 30, after the stipulation in the CARES Act that required airlines receiving money to take certain steps to maintain their workforce will expire.
“A weakened airline industry is not good for America,” she said. “This is an essential service.”
While American has said they plan to take CARES Act loans other airlines have taken a wait and see approach, suggesting they’re fine accessing market capital and they want to understand whether the government subsidized loans are better.
However Chao is very much leaving open the door to the Administration supporting a second round of taking money from the American people that they wouldn’t spend voluntarily, and giving it to airlines.