Congress is hoping to rev up the transportation sector with billions of dollars in new funding.
Democrats, who control both chambers of Congress, are planning to offer more than $50 billion in assistance to airlines, railroads, and other forms of mass transit following a sharp decline in their use during the pandemic.
The funding is provided by the $1.9 trillion COVID-19 relief proposal and will allocate $30 billion to transit agencies, $14 billion to passenger airlines, $8 billion to airports, $1 billion to airline contractors, $1.5 billion to Amtrak, and $3 billion to a program assisting aviation manufacturers with payroll costs, Reuters reported after a review of draft legislation and a briefing with knowledgeable sources.
The travel sector has been hit particularly hard by the coronavirus pandemic, which has resulted in countless would-be travelers opting to remain at home. Boeing and its suppliers have cut thousands of manufacturing jobs since early 2020 as demand for new planes decreased. Additionally, the manufacturer reported $8.4 billion in losses during the fourth quarter of 2020 alone.
Stock prices for airline companies spiked following word of additional funding from Congress, with American Airlines’s stock rising 4.2% and United Airlines’s stock gaining 5%. The stock of Southwest Airlines also rose by nearly 6%.
Airlines nationwide have received $40 billion in payroll support since March of 2020, though airline unions have asked Congress for an additional $15 billion to maintain employees through March 31 of this year, when the current measures for funding expire. The $14 billion provided in the proposed legislation will keep 30,000 airline employees at work through Sept. 30.
Transit agencies were previously granted $39 billion in emergency assistance by Congress. Traffic among New York’s Metropolitan Transit Agency said daily subway travel remains nearly 70% down from typical levels.
A summary of the proposal acknowledged the difficulty of jump-starting the industry. The document said airlines lost more than $35 billion in 2020, noting that it would not be likely for airlines to return to being profitable until at least June of 2021.
The prospect of reviving tourism is complicated by new regulations designed to curb the spread of COVID-19, which may further limit travel. Among the proposals is a policy currently under consideration by President Biden that would require proof of a negative coronavirus test prior to domestic air travel.
Some medical experts support this idea, with Marty Cetron, the director for the Division of Global Migration and Quarantine at the Centers for Disease Control and Prevention, celebrating the suggestion.
“We realize that there’s been a dramatic evolution and increase in both testing platforms and testing capacity. I think this is a really important part of our toolkit to combat this pandemic,” he said.
Others worry that this type of regulation would compound the travel industry’s problems, with Sen. Rand Paul saying that the proposal would kill the economy in the United States.
“Everyone flying domestically is going to have to get tested before you get on plane, before you get back on a plane. You talk about devastating the airline industry,” the Kentucky Republican told Fox News.
The Washington Examiner reached out to Boeing for comment but did not immediately receive a response.
