As many as 50,000 airline workers could be furloughed starting Thursday morning after Congress failed to pass a last-minute deal to extend coronavirus relief aid to the embattled industry.
American Airlines CEO Doug Parker confirmed late Wednesday that his airline would go ahead with 19,000 layoffs — or 14 percent of its pre-pandemic workforce — but said it would “reverse” them if an agreement were reached.
“Tomorrow, we will begin the difficult process of furloughing 19,000 of our hardworking and dedicated colleagues,” Parker wrote in a memo to staff members. “I am extremely sorry we have reached this outcome. It is not what you all deserve.”
United Airlines confirmed that it will cut thousands of jobs, telling employees in a letter: “We regrettably are forced to move forward with the process of involuntarily furloughing about 13,000 of our United team members. We implore our elected leaders to reach a compromise, get a deal done now, and save jobs.”
At stake are the jobs of close to 50,000 pilots, flight attendants, baggage handlers, counter agents and other airline and airport personnel.
A provision of the CARES Act, which President Donald Trump signed in March, covered nearly 75 percent of airlines’ payroll expenses, with the stipulation that airlines not let any workers go until Oct. 1. The provision expires Wednesday night.
House Democrats have proposed an overall coronavirus relief package that would include an extension of the protections, but Senate Republicans have yet to agree. Substantial progress on the deal could not be made before the time limit, Treasury Secretary Steven Mnuchin told Fox Business on Wednesday night.
Talks on the larger package will continue Thursday, he said, adding, “There’s money for airlines.”
However, those talks could come too late for many in the industry.
“Tomorrow, tens of thousands of essential aviation workers will wake up without a job or health care and tens of thousands more will be without a paycheck,” Sara Nelson, president of the Association of Flight Attendants-CWA, said in a statement Wednesday night. “They don’t know how they will pay rent, feed their families, or cover the cost of their prescriptions or medical care. It did not have to be this way.”
Amanda Steinbrunn, a flight attendant who has been with United Airlines for five years, said in an interview: “I feel like I’m being left behind, and there’s nothing we can do. It’s extremely out of our hands, and we’re just sitting around terrified.”
She contracted Covid-19 and recovered — and went on to help transport nurses and doctors. Last month, the airline told her that she would “absolutely” be losing her job Oct. 1 if no extension to the payroll support program was passed, she said. “I don’t have a backup plan. I’m going to be on the unemployment line like so many other people.”
Video: American Airlines CEO and union leader on Thursday’s deadline for more federal aid (CNBC)
It was expected that, by October, the U.S. would have had enough time to get the coronavirus under control and return to more typical travel and expenditure levels. However, garbled national guidance and inconsistent adherence to safety precautions squandered the bought time for travel and other industries.
Inconsistent adherence to safety precautions across the country has led to a spike in infections — squandering the bought time for travel and other industries waiting for an economic recovery.
Now, airline workers are hanging on for hope of assistance from Congress to save their livelihoods.
“Without aid from the federal government, I will be laid off on October 1 and will lose my paycheck and my health insurance,” said Toni Valentine, who works for United Airlines Reservations in Detroit. “Hundreds of thousands of airline workers are facing financial ruin through no fault of our own. How will we take care of our families without a paycheck and health insurance?”
After hitting rock bottom during coronavirus lockdowns, airline travel began to slowly rise again, but it has plateaued well below previous year-over-year averages. Despite new cleaning procedures by the airlines, passengers so far are largely unwilling to fly unless they have to without a safe and widely available vaccine.
Airlines have been feverishly negotiating with their labor unions and offering deals to employees to try to pursue all available options to reduce or delay costs and cuts, such as early retirement and long-term sabbaticals. Hard-hit commercial legacy carriers in particular have been under pressure.
United negotiated a deal with its pilot union to avoid furloughs until at least June, but the rest of its workforce still faces furloughs, the company announced Monday. Last week, Delta announced that it would delay furloughs until Nov. 1, giving it more time to assess its financial situation. American is still on track to begin furloughs Thursday across its workforce.
“The airline industry and many of its employees are like Thelma and Louise, racing toward the abyss,” independent aviation analyst Bob Mann said in an email. “We’ve seen the movie. So, absent a rescue, we know the ending.”
But he said reaching deeper into the government’s pockets to keep the industry afloat was well in the country’s interest.
“Does the nation want an airline industry ready to drive the economy when vaccines have been widely administered? If so, pay up, now, to keep the industry vital until then,” he said.
The critical national infrastructure that the airline industry provides — and that will be key to the country’s economic recovery — could be severely affected by the sweeping industry cuts, Parker said earlier this month. “We want to make sure that when the economy recovers, we are here.”
Many airline hubs are in swing states, so the proposed cuts are in areas President Donald Trump needs to win come Nov. 3. That could put pressure on his Republican allies in Congress to make a deal with Democrats.
Labor unions have strongly urged Congress to step up.
“The Machinists Union stands shoulder to shoulder with House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer in their effort to get a coronavirus relief package passed for all Americans,” said Robert Martinez Jr., president of the International Association of Machinists and Aerospace Workers.
“It is an outrage that working families have already waited more than four months since the House passed the HEROES Act,” Martinez said, referring to House Democrats’ proposed measure. “The Machinists Union will do anything to support our membership and the tens of thousands of our airline members who will be laid off on Oct. 1.”
A major U.S. carrier could even be forced out of business, an industry leader cautioned earlier in the pandemic.
“I don’t want to get too predictive on that subject. But yes, most likely,” Boeing CEO David Calhoun said in an interview with Savannah Guthrie on NBC’s “TODAY” show in May when asked whether he thought a major U.S. carrier would have to go out of business.
“Something will happen when September comes around [and the aid expires]. Traffic levels will not be back to 100 percent. They won’t even be back to 25 percent. So there will definitely be adjustments that have to be made on the part of the airlines,” Calhoun said.