Trump signals willingness to help airlines and markets jump
SILVER SPRING, Md. (AP) — Shares in major U.S. airlines jumped at the opening bell, pulling the broader market along, after President Donald Trump signaled a willingness to help the decimated carriers in seemingly contradictory tweets.
“The House & Senate should IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support,” Trump tweeted late Tuesday night. “I will sign now!”
However, that message followed tweets earlier Tuesday in which Trump said he had told his representatives to end negotiations on a broader relief package until after the election next month.
Wall Street focused on the latter, sending shares of United Airlines up 6%, American Airlines up 4% and Delta Air Lines up 3.6%. JetBlue jumped almost 6% and Southwest rose as well.
The entire transportation has been ravaged by a failure in U.S. to check COVID-19 infections. The largest four U.S. carriers have lost more than $10 billion combined.
Airlines just began furloughing more than 32,000 employees after a federal prohibition on job cuts tied to funding expired. American and United said they could reverse the furloughs if they get additional help.
The White House included $20 billion for airlines in a $1.6 trillion COVID-19 relief proposal, moving closer to House Democrats’ $2.2 trillion plan. Trump’s contradictory tweets Tuesday night further muddled the stalemate between the two parties with the election less than four weeks away.
Airlines and their unions have lobbied for money to keep workers on airline payrolls through March 2021. They received $25 billion, mostly in cash, to pay employees through Sept. 30 in exchange for avoiding layoffs or furloughs.
Tens of thousands of airline employees have already volunteered to take early retirement or buyouts. However, air travel is down 70% compared with last year and major U.S. carriers say they will need to slash that many jobs and potentially more.
Trump also suggested lawmakers to come up with $135 billion for small businesses and said the bill could be paid for with “unused funds from the Cares Act.”
Trump’s tweets came just hours after another that all but quashed any possibility of a broader relief package before the Nov. 3 election, saying he had ordered his representatives to end negotiations until after Election Day.
The Dow Jones Industrial Average tumbled almost 400 points.
Without more stimulus, economists believe growth will slow for the remainder of the year.