Battered Airline Industry Lifted by the American Rescue Plan

The American Rescue Plan, which passed the U.S. House and the Senate, is expected to move through to President Biden’s desk before March 14. The plan has a number of proposed benefits for the aviation sector and aerospace supply chain.

In connection with this relief package, the U.S. House Subcommittee on Aviation held a hearing, “COVID-19 Effects on U.S. Aviation and the Flight Path to Recovery,” on the current state of the airline industry, which is still reeling from sharp reductions in travel during the pandemic. The hearing featured experts in the industry discussing the long-term prospects for U.S. aviation.

The final version of the relief package contains a $15 billion extension of the Payroll Support Program to assist with payroll and benefits for aviation sector employees, $8 billion to help keep airports and concessionaires open and fully operational, and $3 billion for aerospace supply chain workers (which was originally in the Aerospace Manufacturing Jobs Protection Act).

Throughout 2020, in the midst of the pandemic, the number of airline travelers decreased by as much as 95 percent according to the U.S. Government Accountability Office (GAO). Current estimates are that airlines are flying approximately half of their pre-pandemic routes with passenger levels only approaching 60 percent of normal. The GAO and the airline industry estimate that the break-even threshold is at least 80 percent of pre-pandemic passenger levels. 

Even as aggressive U.S. vaccination programs continue to roll out three FDA-approved vaccines and most communities continue to encourage social distancing, masks and other cleaning protocols, consumer confidence in air travel has not yet returned to levels that will prevent additional upheaval in this critical, economic sector. The combination of these efforts and the benefits in the proposed Congressional plan should help begin to ease this turbulence.

For more information please contact the Barnes & Thornburg attorney with whom you work or Ron Miller at 202-408-6923 or ronnie.miller@btlaw.com. 

© 2021 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is proprietary and the property of Barnes & Thornburg LLP. It may not be reproduced, in any form, without the express written consent of Barnes & Thornburg LLP.

This Barnes & Thornburg LLP publication should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.