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US to give aircraft companies US$482 million to avoid job, pay cuts during COVID-19 pandemic

US to give aircraft companies US$482 million to avoid job, pay cuts during COVID-19 pandemic

A US Air Force KC-46A Pegasus jet takes off in view of a line of Boeing 777X jets parked nose to tail on an unused runway at Paine Field, near Boeing's massive production facility in Everett, Wash, Apr 23, 2021. (File photo: AP/Elaine Thompson)

WASHINGTON: The Biden administration is making US$482 million available to aviation industry manufacturers to help them avert job or pay cuts in the COVID-19 pandemic.

The taxpayer-funded relief will cover up to half of the payroll costs at 313 companies, according to the Transportation Department, which said on Thursday (Sep 9) will help save up to 22,500 jobs.

Air travel plummeted due to the spread of COVID-19. The Delta variant has led to elevated cancellations and diminished travel in recent months. More than 100,000 aerospace jobs have been lost in an industry that had employed about 2.2 million people, according to the Transportation Department.

The largest recipient the fund funds announced on Monday is Spirit Aerosystems, a Boeing supplier based in Kansas, which stands to get US$75.5 million that the government says will help protect 3,214 jobs.

Parker-Hannifin of Ohio, which makes hydraulic systems for planes, will get US$39.7 million.

The avionics unit of Japan's Panasonic, based in California, will get US$25.8 million, and several US subsidiaries of France's Safran will get a total of US$24.8 million.

Money for the aerospace companies is coming from a US$1.9 trillion package approved by Congress and signed by President Joe Biden in March.

The relief is similar to a much larger aid programme for US airlines, which have received US$54 billion in the past year and a half. The airlines also agreed not to furlough any workers, but they eliminated tens of thousands of jobs anyway by offering incentives for employees to quit or retire early.

Critics labelled the airline aid a bailout that amounted to several hundred thousand dollars for each job that was spared — 75,000 jobs, by some estimates.

Defenders such as American Airlines CEO Doug Parker say that without the government's help, airlines would have been forced to shut down when traffic fell to levels not seen since the 1950s.

The Federal Aviation Administration, part of the Transportation Department, recently awarded US$100 million to aerospace companies including Boeing, General Electric's aviation division and jet engine maker Pratt & Whitney to make planes less polluting and quieter.

Source: AP/ng


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