US airlines don't just want loans from any US stimulus package - they are looking for government grants as well. This will be vital to keep smaller carriers afloat. Image Credit: Bloomberg

Washington: US Airlines would get $37 billion in grants to keep workers on the job as part of a $71 billion package to rescue carriers and airports struggling with the coronavirus outbreak, but the airlines would be required to adhere to new emissions requirements under a plan released by House Democrats.

The measure would also provide as much as $21 billion in loans to help air carriers continue operations amid plummeting travel because of the virus. Airline contractors would also also see $3 billion for payroll support grants, while airports would see $10 billion in grant funding.

In exchange, airlines receiving aid would have to start offsetting their carbon emissions in 2025 and reduce their overall emissions by 50 per cent by 2050, according to a summary of the $2.5 trillion stimulus bill provided by House Democrats. The legislation also requires the Environmental Protection Agency to finalize emission standards for greenhouse gases from both new and in-service aircraft.

Get rid of the old

The bill would finance the purchase and scrapping older, less efficient airplanes in exchange for the commitment to buy newer ones in a move reminiscent of President Barrack Obama’s “cash for clunkers” programme for the automotive industry.

Carriers would also have to maintain at least a $15 minimum wage for all employees or contracted workers for a period of 10 years upon receipt of financial assistance.

The plan differs substantially from a rival virus stimulus package released last week by Senate Republicans. That legislation proposed making $50 billion in government loans available to passenger airlines plus another $8 billion for cargo haulers but offered no grants, which airlines have said are essential to avoid sweeping job cuts.

Airlines for America, a lobbying group for the largest US carriers, said on Saturday that the industry would be forced to furlough workers unless lawmakers provided at least $29 billion in grants to prop up passenger and cargo carrier payrolls. The Regional Airline Association, which represents smaller carriers that perform about 40 per cent of all flights, has said its members would be decimated without some form of direct aid beyond loans.

Not the way to do it

Pelosi’s plan also includes several strings attached to the airline aid that has drawn the ire of House Republicans.

“Speaker Pelosi has put forward a bill that is full of provisions that have nothing to do with responding to the COVID-19 crisis and helping the American people,” Representative Sam Graves of Missouri, the panel’s ranking member, and Garret Graves of Louisiana, the top Republican on the panel’s aviation subcommittee, said in a statement. “Instead, her bill’s focus is unrelated handouts for her radical environmental allies and other special interests.”