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City expects to learn effect of American Airlines funding soon

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Airlines received an additional $15 billion under the federal relief legislation signed Sunday. American Airlines has kept some of its Dallas flights active in Roswell in spite of coronavirus-related financial difficulties. (Lisa Dunlap Photo)

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American Airlines is due to receive an infusion of additional federal funding after President Donald Trump signed the second major COVID-19 relief aid package on Sunday night, but what that will mean for Roswell passenger air service is not known yet.

“I anticipate that we will be having a conversation with them in January, early January,” said Mayor Dennis Kintigh.

Within 10 days of the signing of the new legislation — House Resolution 133 — American Airlines and other air carriers will receive $15 billion in grants, with at least 60% of the money to be used for payroll and related costs, what is known as the Payroll Support Program or PSP. Another $1 billion in grants has been allocated for air service contractors serving airlines.

According to the terms of the legislation, American Airlines should receive about the same amount that it did from the first aid package, the Coronavirus Aid, Relief and Economic Security (CARES) Act, which was signed into law in March.

American Airlines stated in an April 14 news release that it was allocated $5.8 billion in April from the CARES Act, $4.1 billion in a grant and $1.7 billion in a loan. It also received other loans from the U.S. Treasury in later months.

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A media representative for American Airlines chose not to answer specific questions about how the new funding would effect Roswell. Stacy Day instead referred to a statement issued Dec. 21 by Chief Executive Officer Doug Parker and President Robert Isom after Congress passed the second relief bill.

“This PSP extension will enable us to bring furloughed team members back to work and resume air service to cities and towns that rely on us — all at a critical moment,” the statement read in part.

Roswell has kept its air service to and from Dallas, even after American Airlines announced on Aug. 20 that it intended to suspend flights to many smaller communities, including Roswell, starting Oct. 7. That decision was made by the corporation when Congress had not yet provided additional relief funding, with the timing tied to an expiration of a guarantee to provide minimum air service to communities without other commercial air service that had been part of the CARES funding package.

The news of a possible suspension of service until November prompted several days of negotiations by Kintigh, City Manager Joe Neeb, Roswell Air Center Director Scott Stark, lawmakers and business leaders associated with the Roswell-Chaves County Economic Development Corp. to convince the airline to continue serving the local market.

While American Airlines kept the flights to and from Dallas, the airline did reduce the daily flights from three to two. It previously had cut the Phoenix flights in April, and Day said that the corporation had no new schedule announcements to make at the current time.

The reduced service reflected the severe economic pressures felt by the airlines due to slumping passenger demand. By October, the airline had furloughed 19,000 employees, with an additional 20,000 choosing to take early retirement or long-term leave. Although the corporation was reporting improved demand and flight occupancy during its third quarter of July 1 to Sept. 30, it was losing an average of $44 a million a day during that period, according to an Oct. 22 news announcement.

During negotiations for continued service here, the city of Roswell agreed to ease the airline’s financial pain for local service in some measure. That turned out to be the waiving of storage fees for the 150 or so American Airlines aircraft parked at the Roswell Air Center.

“They actually only asked for relief for October, November and December, so we have gotten through that,” Kintigh said.

Neeb said Dec. 10 that he had made the administrative decision to waive the October fees of about $58,000. The Roswell City Council is due to vote on the November and December fees at an upcoming meeting.

Senior Writer Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at reporter02@rdrnews.com.