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US aviation contractors cut thousands of jobs due to delayed govt aid
More than 16,500 workers from 15 US aviation firms were laid off due to months of delay in payroll aid from the US Treasury
According to an investigation by a US House of Representatives subcommittee, had the US Department of the Treasury met the deadline set by Congress, a lot of the jobs would have been kept.
Congress allocated $3 billion to aviation contractors under the Coronavirus Aid, Relief and Economic Security Act (CARES Act) to cover payroll for six months as the pandemic caused a decline in air travel.
The Treasury Department was required to begin distributing funds to eligible companies within 10 days of the CARES Acts' approval on March 27.
There was also a ban on job cuts through September.
Of the top seven contractors, Swissport was made to wait for the longest, reaching 99 days, before its payroll support agreement with the Treasury department was finalized.
Gate Gourmet waited 78 days, while Flying Food Fare had to wait for 74 days.
Nearly 12,000 layoffs and furloughs transpired at those three companies due to the delays.
The companies eventually received the full amount of federal aid even though they had laid off many of those workers.
Congress may pass a second stimulus package for the aviation contractors that could extend those funds for another six months.
However, layoffs should be prohibited until a company uses all of its funds.