American Airlines

Airline Bosses Demand Extension of CARES Act Funding

Following the near collapse of the travel industry during 2020, thanks to the on-going global covid-19 pandemic, another airline has confirmed that they will be reducing their number of employees.

This week 19,000 employees at American Airlines were informed that they would be furloughed once the federal relief the company was receiving from the government expires. Discussions have continued within government as to whether the CARES Act – which is due to expire this fall – should be extended however they have regularly stalled as each side debates obstacles that have been put in the way. Currently companies are allowed to receive funding via the Payroll Support Program (PSP) however one of the requirements for that funding is that airlines must not reduce their staff until October 1. As that date gets closer, and travel continues to struggle to take off, airlines have started to confirm that they are having to layoff some of their staff in order to keep their companies going.

Although all industries have suffered during the crisis air travel has been one of the worst hit after governments around the world closed their borders to all but essential travel in an attempt to keep the spread of coronavirus at bay. However it was generally believed that by now – nearly nine months after the pandemic was first announced – travel would have been back to some level of normality. This has not been the case and air travel continues to be around 70% less than last year, with many experts predicting it could take until 2024 before the travel industry is near the pre-pandemic levels again.

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Confirming the furloughing in a letter to employees, CEO of American Doug Parker and American’s President Robert Isom admitted it was “the hardest message we have had to share so far.” The figures of furloughed employees include 1,600 U.S. based pilots as well as 8,100 U.S. based flight attendants. In the letter senior vice president of flight service at American Airlines, Jill Surdek, confirmed that “while the furlough is temporary, there is no way to predict how long it will last.”

Unfortunately American is not the only airline company to have made announcements this week of job losses. Delta Air Lines have confirmed that they too have made arrangements to furlough nearly 2,000 of their pilots. With more than 1,500 pilots already agreeing to voluntarily leave the company that’s nearly 3,500 pilots lost by the airline. United Airlines have also confirmed they will be looking at reducing their workforce once the relief fund finishes. Although an exact figure has not been confirmed they have warned that it could be up to 36,000 employees who may be losing their positions, nearly half the payroll.

JetBlue Airways have as yet to make any announcements and are still working on keeping all their staff. However it appears they could merely be putting off the inevitable, the same with Southwest Airlines. Airline executives are continuing to push lawmakers to extend the PSP in an attempt to stall the layoffs. Currently 16 Senate Republicans alongside more than 200 House members are supporting extending the payroll support program, but discussions are continuing while an agreement can be found.

The PSP has seen $25 billion of government aid handed to the airline industry since the CARES Act was passed in March 2020, which has seen the pause button pressed on many employees losing their jobs. However without an extension the possibility of the remaining staff being furloughed or further layoffs is high. Senators have written to Senate Majority Leader Mitch McConnell and Senate Minority Leader Chuck Schumer stating that, “in recent weeks several airlines have notified significant segments of their workforces that their jobs could be at risk on October 1, 2020, following the expiration of CARES Act relief”.

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Isom and Parker are in favor of an extension – as are all airline executives – saying, “the one possibility of avoiding these involuntary reductions on October 1 is a clean extension of the PSP. Led by your labor unions, with the support of the industry, we have generated enormous bipartisan support for such an extension.” Delta Air Lines CEO Ed Bastion also voiced his support of a ‘clean extension’ for a further six months saying, “the CARES Act was incredibly successful in that it gave airlines six months, post the pandemic start, to be able to have a plan to deal with the pandemic.”

The Air Line Pilots Association is also advocating the need for an extension with president Capt. Joe DePete said, “Congress provided critically needed financial aid to the airlines at the outset of this pandemic for the purpose of preventing hundreds of thousands of layoffs. Unless we all act now, this aid, and the strong labor protections attached to it, will expire October 1 – even though the virus is not under control and the travel industry remains devastated.”

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