The beleaguered airline industry will get its $58 billion bailout after the U.S. Senate agreed overnight to a $2 trillion stimulus package to aid a domestic economy ravaged by the coronavirus pandemic.
The news caps an extraordinary week of partisan wrangling over elements in the package as the virus seemingly grows in strength. Gov. Andrew Cuomo of New York, now the epicenter of the pandemic in the U.S., said Tuesday that the number of coronavirus cases in his state is doubling every three days.
The Senate will officially vote on the package later today, Wednesday, March 25. Details are vague at the moment, but according to CNN, the proposal is said to include $250 billion set aside for direct payments to individuals and families, $350 billion in small business loans, $250 billion in unemployment insurance benefits and $500 billion in loans for distressed companies.
Included in that $500 billion is $50 billion for the struggling airline industry and $8 billion for cargo airline, settling the debate over whether the carriers deserved a bailout after spending 96 percent of its cash over the past 10 years on stock buybacks to bolster its shares and pay dividends to shareholders.
Whether or not that $50 billion is all in loans remains to be seen. The airlines were hoping half the total would come in the form of grants that they wouldn’t have to pay back.
It is also unknown whether any strings are attached to the loans, as critics have called for the airlines to eliminate ancillary fees, freeze CEO bonuses and promise not to lay off employees during the crisis.
Cruise lines and hotels are also expected to receive a portion of the stimulus, and all travel-related businesses will have to go before a Congressional hearing to lobby for their worthiness for such loans.
This is a developing story that will be updated during the course of the day.
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