People walk through a sparse international departure terminal at John F. Kennedy Airport (JFK) as concern over the coronavirus grows on March 7, 2020 in New York City.
Spencer Platt | Getty Images
Lawmakers on Capitol Hill were close to a deal that would include $25 billion in grants for airlines struggling from the impact of coronavirus, a person briefed on the discussions said Tuesday.
The aid, part of a massive stimulus package to blunt the economic damage from the spreading coronavirus, would be a resounding victory for airlines, their lobbyists and the labor unions that argued loans alone would not be enough to preserve jobs. The aid would also include another sum of loans, the person said.
Lawmakers said they were close to a deal on the overall legislation earlier Tuesday.
U.S. passenger and cargo airlines have sought $58 billion in government aid, half of it in loans and the other half in cash grants. Republican senators had proposed that sum but all in loans, which airlines and labor unions say would saddle carriers with debt and make a recovery more difficult.
Airline shares surged on news that lawmakers were nearing a deal. In early-afternoon trading, American was up 33%, United rose 23% and Delta was nearly 20% higher.
Coronavirus and draconian measures to stop its spread have decimated travel demand.
While a final deal is not done, the $25 billion in grants for passenger airlines would go toward paying airline employees, which number 750,000. Thousands of others work as airline contractors, in airports and elsewhere in aviation. U.S. airline executives pledged over the weekend that they would not furlough workers through Aug. 31 if they received half of their request in grants. They also said they would cap executive pay and pause buybacks for the life of government loans.
Reuters earlier reported the near-deal on grants, saying the total sum of this cash would be $32 billion, including payouts to airline contractors and cargo carriers.