Airlines furlough tens of thousands as payroll support expires

Industry had hoped Congress would extend aid that expired Wednesday

American Airlines furloughed 19,000 employees. (Caroline Brehman/CQ Roll Call file photo)
American Airlines furloughed 19,000 employees. (Caroline Brehman/CQ Roll Call file photo)
Posted October 1, 2020 at 1:36pm

As Congress remains at odds over the latest round of COVID-19 relief, U.S. airlines began furloughing tens of thousands of employees Thursday.

With revenues decimated by plummeting ridership caused by the coronavirus pandemic, airlines had been hoping for an extension of the $32 billion in payroll support grants Congress approved as part of a $2 trillion relief bill in March. That aid — which included $25 billion for passenger airlines, $4 billion for cargo airlines and $3 billion for airline contractors — expired Wednesday.

Their latest hope had been in a $2.2 trillion relief bill put forward by House Democrats that would extend the bulk of that relief through March 31.

But on Thursday morning, negotiations between House Democratic leadership and Treasury Secretary Steven Mnuchin on that bill were still ongoing.

[Democrats propose billions for airlines, transit in virus relief bill]

American Airlines furloughed 19,000 employees, according to CEO Doug Parker. Parker wrote Wednesday night that he is in contact with Mnuchin about aid, and that Mnuchin reassured him “it is possible” an agreement could come in the next few days. Both the House and Senate are also considering standalone payroll support extensions.

But, Parker also wrote, “there is no guarantee that any of these efforts will come to fruition.”

He added that he has told Mnuchin that if payroll support is extended over the next few days, the airline will reverse its furloughs.

United, which furloughed roughly 13,000 employees, sent a similar message when it was clear Congress would not reach a deal Wednesday night.

“Today is a very sad day for all of us here at United,” the company wrote in a memo to employees.

United also said it will reverse the furloughs if the support is extended in the next few days.

'Reach a compromise'

“We implore our elected leaders to reach a compromise, get a deal done now, and save jobs, the company memo read.

Of the 13,432 employees United has furloughed, 6,939 are inflight services, 2,241 are in technical operations, 1,995 are in airport operations and 1,400 are in management or administrative positions. Employees in catering and call centers are also affected.

Hawaiian Airlines announced it would reduce its workforce of 7,447 by about one-third, cutting 2,501 employees. "We continue to advocate for a clean six-month PSP extension to give passenger demand an opportunity to recover from historic lows and ensure our employees remain prepared to increase our operations to support an economic recovery," a company spokesman said.

Delta Air Lines CEO Ed Bastian, meanwhile, said his company has managed to avoid furloughs for now. He told employees such measures were avoided by scaling back operations and because some 40,000 employees “voluntarily signed up for short- and long-term unpaid leaves of absence.” Other employees took voluntary exit packages or reduced hours. The airline is still negotiating with the Air Line Pilots Association over possible furloughs or layoffs for about 1,900 pilot jobs.

"Hopefully in six months we'll be in a better spot,” he told CNN Thursday, saying the airline industry is “essential” and should be protected.

Association of Flight Attendants-CWA, AFL-CIO President Sara Nelson expressed frustration at Congress’ inability to reach a deal.

“It shouldn’t be this hard to do the right thing,” she said in a news release.

The furloughed employees “will wake up without a job or healthcare and tens of thousands more will be without a paycheck. They don’t know how they will pay rent, feed their families, or cover the cost of their prescriptions or medical care,” she continued.

“It did not have to be this way,” she said, but she also expressed hope Congress will act quickly in order to reverse the furloughs.

Lindsey McPherson contributed to this report.