US airlines rise as Trump's proposal revives bailout hope

[BENGALURU] Shares of US airlines rose on Thursday, buoyed by hopes for a second bailout after the Trump administration proposed including a US$20 billion extension in aid for the battered industry in a new stimulus plan.

Negotiations for coronavirus relief aid between the White House and House Democrats had stalled in large part over the price tag, with Democrats seeking US$2.2 trillion and the White House staying firm at US$1.5 trillion.

Shares of American Airlines, United, Delta Air Lines and Southwest Airlines were up between 1.3 per cent and 2.8 per cent in pre-market trading.

US airlines have been pleading for another US$25 billion in support to protect jobs for a further six months after the previous package, which banned furloughs, expired at midnight Sept 30.

The deadline expiry prompted American Airlines and United Airlines, two of the largest US carriers, to announce they were beginning furloughs of over 32,000 workers.

Both airlines said, as per memos seen by Reuters, they would reverse furloughs if Washington extends aid which affect about 13 per cent of their workforces before the pandemic.

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"US carriers have avoided the hard restructuring to date. While there have been furloughs, planes have been retired, and some layoffs are coming, but managements of these airlines have positioned these companies for an eventual recovery," said Peter McNally, an analyst at research firm Third Bridge.

"The extreme numbers are unlikely in the short term."

REUTERS