By Tracy Rucinski and David Shepardson
CHICAGO/WASHINGTON (Reuters) - U.S. lawmakers are considering shifting some of about $58 billion in proposed emergency loans to the airline industry to cash grants to cover payroll costs, four people familiar with the matter said on Monday.
U.S. House Democrats were supporting the grants as part of a new proposal to help U.S. airlines grapple with nose-diving demand in the face of the coronavirus pandemic.
Business Insider said the draft of a proposed House bill dated Sunday would provide airlines with $21 billion in grants and $37 billion in loans.
Republicans and Democrats were still struggling Monday to reach agreement on a far-reaching coronavirus stimulus package, including the airline aid, after failing to reach a deal over the weekend.
Republicans have opposed providing cash grants to the passenger and cargo carriers, preferring assistance in the form of $58 billion in loans.
Senate Majority Leader Mitch McConnell on Monday said Democrats wanted additional provisions as part of a bill including "new emissions standards for the airlines."
Democrats have also pushed for a measure barring airlines from setting aside union contracts if an airline receives government loans and then files for bankruptcy.
Airlines had made a plea over the weekend that $29 billion of $58 billion sought in assistance be in the form of cash grants. In return, they offered to make no job cuts through Aug. 31 and to accept curbs on executive pay and forgo paying dividends or stock buy backs.
United Airlines Holdings Inc (O:UAL) sent a fresh memo jointly signed by its union leaders, asking employees to send a letter or email to their representatives in Washington, urging quick, bipartisan action to protect airline jobs.
"Your voice matters - whether you work on the ramp, greet customers in the lobby, take calls in our contact centers, prepare food for passengers, service our planes or fly on our aircraft - and our representatives in government need to understand what's at stake if they do not act," the memo said.
Airlines including United have also said they are encouraging employees to apply for voluntary unpaid leaves of absence among other measures aimed at saving costs.
Globally the number of scheduled flights last week was down more than 12% from a year ago, flight data provider OAG said, and many airlines have announced further cuts to come as demand continues to drop.
Southwest Airlines (N:LUV) became the latest U.S. airline to slash its capacity by about 25% on Sunday, bringing forward and increasing cancellations that were initially due to run between April 14 and June 5. The cancellations include the suspension of all international flying until May 4, it said.