(Bloomberg) -- A last-ditch effort to pass legislation in the House to prevent massive airline layoffs was blocked on Friday, ending an attempt by House Speaker Nancy Pelosi to bypass stalled talks to agree on a stimulus package.
Representative Peter DeFazio, an Oregon Democrat who was leading the push, said Republicans halted his attempt to bring up the bipartisan measure. That effectively ended hopes until next week at the earliest for payroll assistance to struggling carriers, which have already begun laying off tens of thousands of workers.
“Madam Speaker in plain English, what you just said is that the Republican majority killed this legislation, plain and simple,” DeFazio said on the House floor.
DeFazio, chairman of the Transportation and Infrastructure Committee, appeared frustrated, at one point slamming his hand against the lectern when the chair told him he couldn’t continue talking.
The back and forth whipsawed airline stocks, which fell early in the session and then jumped on Pelosi’s announcement that she would push for a stand-alone measure to help carriers. A Standard & Poor’s index of U.S. airlines pared gains after the aid was blocked, climbing 1.7% at 3:01 p.m. in New York.
Payroll support of $25 billion for passenger carriers expired Sept. 30, prompting American Airlines (NASDAQ:AAL) Group Inc. and United Airlines Holdings (NASDAQ:UAL) Inc. to start laying off tens of thousands of employees.
“As relief for airline workers is being advanced, the airline industry must delay these devastating job cuts,” Pelosi said in a statement. “This initiative is focused solely on the workers, keeping them on the payroll so these workers maintain their critical training and certification requirements unique to their industry.”
Pelosi’s support of standalone legislation proposed by DeFazio signaled a newfound willingness to provide airline aid outside of a comprehensive economic rescue package. But it also came at a time of heavy political maneuvering during the lead-up to the November elections in which both parties are trying to blame the other for a lack of Covid-19 aid.
To pass on such short notice, the measure needed unanimous backing by all members.
Hit by an unprecedented travel slump because of the coronavirus pandemic, airlines have been parking jets, paring flight schedules and asking employees to accept voluntary separation deals such as buyouts and temporary leave.
‘Cannot Wait’
As DeFazio sought to push his attempt at aid, American said in a statement: “As promised, we will reverse our furlough process and recall any impacted team members if the Payroll Support Program is extended in the next few days.”
United, Delta Air Lines Inc (NYSE:DAL). and Southwest Airlines (NYSE:LUV) Co. didn’t immediately comment, nor did trade group Airlines for America.
“Aviation workers cannot wait,” said Sara Nelson, president of the Association of Flight Attendants-CWA. “While Congress and the administration continue to negotiate a broader deal, we are out of time.”
Assistance to pay for airline payrolls has received widespread support. President Donald Trump and a group of Republican senators have previously said they supported the goal. White House economic adviser Larry Kudlow told reporters Friday that the chief executive officer of American Airlines called him.
“The airlines need some help,” Kudlow said.
A bill introduced by Republican senators Roger Wicker of Mississippi and Susan Collins of Maine on Sept. 21 would give passenger air carriers, cargo air carriers, and airline contractors an additional $28 billion in pandemic aid to cover payrolls.
So far, the bill hasn’t been taken up and Senate Majority Leader Mitch McConnell hasn’t scheduled a vote on it.
The bills would require airlines accepting aid to hold off on layoffs until March 31, 2021.
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