The pandemic bill signed by President Biden on 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 are accelerated.
After Congress approved the legislation this week, which includes $ 14 billion for airlines and an additional $ 9 billion for airports and other businesses, American Airlines and United Airlines told 27,000 employees that they would receive the further notices they received in recent weeks, can ignore. The airlines have issued the warnings, which are legally required due to livestock cuts, because they were prepared to take the lead at the end of this month when an earlier round of federal aid expired. The new bill extends aid to September.
“If you have one of the WARN Act notices we sent out in February, then tear it up,” Doug Parker, U.S. CEO, said in an Instagram video. “There will be no incidents at American Airlines in April, and with the increase in vaccinations, hopefully never again.”
The emergency relief package, which Mr. Biden said it is necessary to protect the economy and workers and that many Republican lawmakers have criticized as excessive, is the third to provide funding to keep airline workers employed since the pandemic began. Last March, Congress provided passenger services with $ 25 billion in loans and another $ 25 billion in wage subsidies. It renewed wage financing in December by a further $ 15 billion and again this week.
The Biden Bill also sets aside $ 1 billion for aviation contractors and $ 8 billion for airports to help them operate normally, limit the spread of the virus, and pay workers and service their debts. In exchange for the aid, airports, contractors and airlines are banned from making large layoffs until September and are forced to make other concessions.
The aviation and travel industry has been hit hardest by the pandemic. A year ago, the number of people flying dropped when the virus spread widely and government officials restricted or discouraged travel. At the beginning of April, the number of people flying every day dropped by 96 percent from a year earlier.
Travel has recovered somewhat since then. On average, about a million people a day were screened at the airport’s security checkpoints in the past week, according to data from the Transportation Safety Administration with about 46 percent of the same period in 2019.
According to Airlines for America, an association representing the United States, the United States and the other major airline representatives, they still lose an average of $ 150 million a day. The widespread distribution of vaccines has given the industry hope for a setback, but airlines are expected to lose money during the summer, and most analysts and executives in the industry do not expect the journey to recover until 2023 or 2024.
Fitch Ratings said in a report on Thursday that it now expects a slower recovery of air travel in the first half of the year in the United States and Canada than it had previously predicted. But the second half of the year could be a “fairly strong setback,” Fitch analysts said, citing recent surveys that show many people are eager to travel once they feel safe.
“According to Fitch, it may not be necessary to achieve full herd immunity to at least start getting a setback in the journey,” the analysts wrote. “On the contrary, a decrease in mortality rates caused by vaccine coverage among vulnerable populations may be sufficient to ease pandemic restrictions and build up the convenience of travelers.”
Questions about the new stimulus package
The stimulus payments would be $ 1400 for most recipients. Those who are eligible also receive an identical payment for each of their children. To qualify for the full amount of $ 1400, a single person needs an adjusted gross income of $ 75,000 or less. For household heads, the adjusted gross income should be $ 112,500 or less, and for married couples filing jointly, the number should be $ 150,000 or less. To be eligible for a payment, a person must have a social security number. Read more.
Buying insurance through the government program, known as COBRA, will temporarily become much cheaper. COBRA, for the Consolidated Omnibus Budget Reconciliation Act, usually allows someone who loses a job to buy coverage through the former employer. But it is expensive: under normal circumstances, a person has to pay at least 102 percent of the premium cost. Under the relief bill, the government would pay the entire COBRA premium from 1 April to 30 September. A person who qualified for a new, employer health insurance somewhere else before September 30 will lose the free coverage. And someone who voluntarily left a job would also not be eligible. Read more
This credit, which helps working families to reimburse the cost of childcare for children under 13 and other dependents, will be significantly extended for a single year. More people would be eligible, and many recipients would get a bigger break. The account will also make the credit fully repayable, which means you can collect the money as a refund, even if your tax account is zero. “It will be useful for people at the bottom” of the income scale, says Mark Luscombe, chief federal tax analyst at Wolters Kluwer Tax & Accounting. Read more.
There is a big one for people who already have debt. You do not have to pay income tax on forgiven debts if you qualify for a waiver or cancellation – for example, if you have been in a required income-driven repayment plan for the required number of years, if your school has cheated or The Congress or the President owes $ 10,000 numbers of people away. This will be the case for debts forgiven between January 1, 2021 and the end of 2025. Read more.
The bill provides billions of dollars in rent and assistance assistance to people who are struggling and at risk of eviction from their homes. About $ 27 billion would go to first aid. The vast majority of them will supplement the so-called Coronavirus Aid Fund, created by the CARES Act and distributed by state, local and tribal governments, according to the National Housing Coalition. This is in addition to the $ 25 billion aid offered by the aid package passed in December. To receive financial assistance – which can be used for rent, utilities and other housing expenses – households must meet various conditions. Household income cannot exceed 80 percent of the median income, at least one household member must be at risk of homelessness or instability in homes, and individuals must be eligible for unemployment benefits or financial problems (directly or indirectly) experiencing pandemic. According to the National Coalition for Low Housing, assistance can be provided for up to 18 months. Families with lower incomes who have been unemployed for three months or longer will be given preference for assistance. Read more.
In the meantime, airlines are doing everything in their power to get people to book tickets, set up direct flights to popular beach destinations, reduce fares and promise that strict safety procedures must be strictly enforced.
But obstacles remain. This week, the Centers for Disease Control and Prevention said people who are fully vaccinated can safely participate in a wider range of activities than those who have not yet done so, including meeting in small groups at home without masks or social distance. To the frustration of airline and other executives in the industry, the agency continued to recommend that everyone avoid travel.
Airlines argued that there is a low risk of virus transmission during flight, due to the high ventilation systems in the cabin, strong disinfection practices and strict mask requirements. But travel has made it possible for the virus to spread around the world.
“We know that after mass travel, after holidays, after holidays we see an increase in cases,” said the CDC director, dr. Rochelle Walensky, said on MSNBC on Monday night. “And so, we really – just with 10 percent of the people being vaccinated – want to make sure our travel is limited.”
The distribution of the vaccines will also not solve all the problems in the industry. It could take at least another year, though not much longer, before corporate and international travel, which is usually more profitable for airlines than leisure bookings, begins to recover. Some people speculated that the business trip would be permanently reduced as salespeople and other professionals became accustomed to video conferencing and realized that many of the trips they undertook were wasteful.