Today is crunch day – October 1st, 2020. It’s the date that the $25 billion federal payroll support scheme runs out. Some US airlines are now going ahead with the mass furloughs they threatened would become a reality if Congress and the Trump administration could not agree on a new coronavirus relief package.
Despite intense efforts from the airlines to convince lawmakers and officials to extend payroll support, job cuts across US commercial aviation are set to begin today. Both American Airlines and United, who are now furloughing 32,000 employees in total, said that workers could be recalled if a new deal is reached within days.
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American furloughing even more than planned
Late on Wednesday, American Airlines announced it would be furloughing 19,000 employees. That is close to 14% of its staff, and a higher number than the 17,500 the carrier had previously warned were at risk.
In an internal letter to the company’s staff, American’s CEO Doug Parker said that he had spoken on Wednesday with Treasury Secretary Steven Mnuchin about the ongoing negotiations regarding second round of aid for the airlines. Unfortunately, Mr Mnuchin had given him no guarantees a deal would be reached.
“I am extremely sorry we have reached this outcome. It is not what you all deserve. It is a privilege to advocate on behalf of the hardworking aviation professionals at American and throughout the industry, and you have my assurance that we will continue to do so in the days ahead,” he said in the letter, seen by CNBC News.
Parker further stated that the airline was not done fighting and that it would recall employees if congressional leaders and the administration were to come to an agreement. However, there was no mention of exactly how long that window would remain open.
United prepared to reverse within a few days
United Airlines said it would be forced to furlough about 13,000 employees beginning today, but this could be reversed if a deal is reached within the next few days.
“While sadly, involuntary furloughs begin today, we haven’t given up,” the airline said in a statement seen by the Washington Post. “In a continuing effort to give the federal government every opportunity to act, we have made clear to leadership in the Administration, Congress and among our union partners that we can and will reverse the furlough process if the CARES Act Payroll Support Program is extended in the next few days.”
While United has reached an agreement with the Air Line Pilots Association (ALPA) that the carrier would furlough none of its pilots until at least June 2021, things are looking grim for United’s flight attendants, who make up the bulk of the furloughs.
“Washington just woke up”
Sara Nelson, President of the Association of Flight Attendants-CWA, released a statement on Twitter when it became clear that the September 30th deadline for extension of the relief package would not be met. She said that lawmakers had just woken up and that she still believes there is a chance to get the payroll support scheme extended.
"It seems DC just woke up to this deadline. There is now real momentum to negotiate a COVID bill, including #ExtendPSP. Airlines have stated they would reverse the furloughs if this is achieved within days. There is no time for nonsense. Time is up. #ReliefNow." – @FlyingWithSara pic.twitter.com/IUVHrrf4mN
— AFA-CWA (@afa_cwa) October 1, 2020
The thought of so many aviation workers living with such tremendous insecurities for their jobs and their health coverage at this time is frankly gut-wrenching. Hopefully, the politicians in Washington can let go of their partisan bickering, even if it is an election year, and reach an agreement within the next few days.
Do you believe a new support scheme can be negotiated in time? Let us know your thoughts in the comments.