After months of delays that saw tens of thousands of workers furloughed, a deal was reached on the weekend that should see United States airlines receive a further $15 billion in payroll funding. It’s part of a broader package to bolster the United States economy that will see the airlines bring back those furloughed workers.
Welcome news for the airline industry and its employees
United States-based airlines received $25 billion in payroll assistance between March and September. That kept tens of thousands of people in jobs as travel demand stagnated. But that assistance expired on September 30. Since then, airlines have laid off tens of thousands of workers. That’s in addition to the tens of thousands more who voluntarily left the industry. The latest round of payroll assistance will see the furloughed workers brought back to work until at least the end of March. The deal was met with delight across the airline industry.
“We applaud the Senators who recognized this moment and rose above the political clouds to demonstrate we can work together for solutions,” said Sara Nelson, president of the Association of Flight Attendants in a statement seen by Simple Flying.
“This is certainly good news for our economy, our industry, and our airline – but it’s especially good news for those who have been without a paycheck, and we can’t wait to welcome them back,” said Scott Kirby, CEO of United Airlines in a letter to employees sent out on Monday.
“If this legislation passes, we’ll be able to recall our U.S.-based furloughed team members in a way that would have their pay and benefits reinstated back to December 1. And, if passed into law quickly, we should be able to get everyone a paycheck on Christmas Eve,” American’s Doug Parker told his employees yesterday.
Delta Air Lines has declined to comment until the legislation is formally passed.
The payroll deal is not a long-term fix
There are a couple of caveats. The funding is a deal reached in Washington after months of wrangling. But it hasn’t passed into law yet. However, there’s a widespread expectation it will pass overnight. All up, the deal will pump a further $900 billion into the United States economy.
The funding will see the furloughed workers back on the payroll until the end of March. That’s better than nothing, but it doesn’t resolve issues the industry faces post-March.
“We don’t expect customer demand to change much between now and the end of the first quarter of 2021,” said Scott Kirby. “United has been realistic about our outlook throughout the crisis, and we’ve tried to give you an honest assessment every step of the way.
“The truth is, we just don’t see anything in the data that shows a huge difference in bookings over the next few months. That is why we expect the recall will be temporary.”
Sara Nelson says over one hundred thousand flight attendants and other aviation workers have been without paychecks since October 1. Ms. Nelson says her organization alone made 43,000 phone calls and sent 100,000 letters lobbying for this payroll support. She notes this is only the beginning, and there’s more work to be done.
Despite the payroll funding only providing temporary relief, it was widely welcomed. It’s a rare bit of good news going into Christmas and the New Year. It’s especially good news for those furloughed airline workers who will now pick up a paycheck.
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