By David Shepardson
WASHINGTON (Reuters) - The chief executives of 10 U.S. passenger and cargo carriers on Saturday told Congress that unless they get direct cash assistance many will be forced to take "draconian measures" including to furlough workers.
Delta Air Lines (N:DAL), American Airlines Group (O:AAL), FedEx (N:FDX), United Airlines (O:UAL), Southwest Airlines Co (N:LUV), UPS and others on Saturday warned in a letter to lawmakers that "time is running out." Airlines promised that if they get $29 billion in cash grants they will not cut their workforce before August 31. Senate leaders are hoping to reach an agreement on a bipartisan stimulus and rescue package on Saturday.
The airlines also urged Congress not to attach additional conditions beyond the ones on pay, dividends and stock buybacks.
"We respectfully urge Congress not to pursue opportunistic measures that will hurt, not help our ability to recover," they wrote. Some in Congress want airlines to agree to consumer friendly provisions, like limiting baggage and other fees or committing to flying more environmentally friendly airplanes.
A senior congressional aide said Saturday grants remain on the table in negotiations but there are significant bipartisan concerns and it is unclear what the final package will look like.
A Senate Republican bill released on Thursday would authorize $58 billion in loans to airlines but bar cash grants. It would also allow the Treasury to seek stock, options or warrants as part of any governmental assistance.
Airlines on Monday sought $58 billion in cash grants and loans equally divided, with $50 billion for passenger airlines and $8 billion for cargo carriers. They also sought billions in additional tax relief.
The airlines in the Saturday letter also agreed to accept limits on executive compensation, eliminating stock buy backs and dividends over the life of the loans. "The breadth and immediacy of the need to act cannot be overstated. It is urgent and unprecedented," they wrote.
Also signing the letter were the chief executives of Alaska Airlines, JetBlue Airways (O:JBLU), Hawaiian Airlines and Atlas Air Worldwide (O:AAWW).
The Republican bill introduced on Thursday would set aside another $150 billion for a separate fund and Treasury would determine who could qualify. Boeing Co (N:BA), which has sought $60 billion in U.S. government loan guarantees for itself and the entire aviation manufacturing sector, could seek loans from that fund.
Boeing on Friday agreed to suspend its dividend, not buyback stock and said its chief executive would forgo pay for the rest of 2020.