US airlines on a rollercoaster after Trump halts stimulus package negotiations but hours later makes big U-turn

Will US airlines receive another bailout or not?

 

It was an interesting few hours on Tuesday night when President Trump instructed Republicans to stop negotiating with DemocratsΒ over a Covid-19 relief bill, and will only resume talks after the election.

 

 

The shock tweet sent stocks across the board into the red, especially airlines who have eagerly awaited another bailout to prevent mass layoffs from continuing.

 

Airlines have started cutting tens of thousands of jobs since Thursday as a federal prohibition on jobs cuts in the industry expired.

 

Many political commentators saw Trump’s announcement as a self-inflicted wound, with experts warning that the US economy remains fragile following a recession earlier this year.

 

Speaking to CNBC, an unnamed banker asked: “Why would you concede to this and lose? It’s not like Donald Trump gives a s*** about the deficit, and he wouldn’t be against putting his name on the checks.”

 

It is unclear if the President’s advisors told him the tweet wasΒ an ill-conceived move leading up to the election, because only hours later Trump appeared to have changed his mind.

 

Announcing on Twitter again, the President wrote: “The House & Senate should IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support, & 135 Billion Dollars for Paycheck Protection Program for Small Business. Both of these will be fully paid for with unused funds from the Cares Act. Have this money. I will sign now!”

 

 

 

Shares of major US airlines gained on Wednesday’s pre-market, reversing Tuesday evening’s declines.

 

Airline executives and labour unions spent the last few weeks lobbying for more aid in Washington which failed to materialiseΒ as Democrats in Congress and the Trump administration repeatedly failed to reach an agreement on a stimulus package.

 

“Time already ran out for U.S. airlines and many of our employees, yet there is a glimmer of hope that our leaders in Washington will act and save these jobs before it’s too late to turn back the clock,” Airlines for America, a lobbying group that represents major US airlines, said in a statement.

 

“Some U.S. airlines may be able to reinstate employees if they receive direct payroll assistance from the federal government soon, but that becomes increasingly challenging with each passing day.”