The newly installed Biden administration in Washington may turn out to be the airline industry’s new best friend. There are reports a House Committee in Washington will meet this week to consider extending payroll support through to September 30. If the deal goes through, a further US$14 billion could flow to the airlines for payroll support.
Airlines gearing up to furlough workers this spring
The news comes just a week after American Airlines sent WARN letters to approximately 13,000 US-based workers.
“Unfortunately, we find ourselves in a situation similar to much of 2020,” American Airlines CEO Doug Parker told workers in the letter dated February 3.
“We fully believed that we would be looking at a summer schedule where we’d fly all of our airplanes and need the full strength of our team. Regrettably, that is no longer the case.”
United Airlines has also flagged the jobs of approximately 14,000 workers are at risk once the current round of payroll support ends on March 31.
However, relief may be at hand. Reuters is reporting on a Democrat plan to extend payroll assistance through to September 30. It will see airlines receive a further $14 billion on top of the $40 billion already received. Reuters says a US House Committee will look at the plan on Wednesday.
Airline industry lobby group, Airlines For America, welcomes the news. In a statement, Airlines For America CEO Nicolas E. Calio told Simple Flying;
“We strongly support the call from aviation union leaders to extend the successful payroll support program, which has been vital to preserving the jobs of our hardworking employees.
“These men and women are the backbone of our industry, and it is essential that they remain trained and on the job.”
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Airlines pin hopes on vaccine rollout
There’s hope among United States-based airlines that 2021 will prove better than 2020. But the general view is that it all depends on the speed and management of the vaccine rollout. Widespread vaccination needs to occur before airlines expect a trend towards normal flying conditions. But as American’s Doug Parker noted, the vaccine rollout isn’t going as swiftly as initially hoped.
“The vaccine is not being distributed as quickly as any of us believed,” he said.
Among the US airlines, American is hedging its bets about when it believes travel demand will tick up and certainty will return for its workers. United Airlines is hoping for some improvement in the latter half of 2020. Delta Air Lines is more upbeat, having tentatively flagged a return to profitability over the upcoming summer season.
Biden administration may prove the airline industry’s new best friend
Following the Biden administration assuming power in Washington, the airline industry was initially disappointed it wasn’t getting much attention. But as the administration settles in, Washington may be coming to the party.
The airline industry, lobby groups and unions associated with the industry have been actively campaigning for a third round of payroll assistance.
“Unless Congress acts, recovery will be too late to avoid catastrophe for aviation workers,” says the Association of Flight Attendants (AFA). In a letter dated January 29 and sent to key figures in Washington, including the US President, the AFA’s Sara Nelson said the provisions of payroll support need to continue, including full furlough protections.
“Extending payroll support will support the families and communities of aviation workers and the one in 14 jobs in our country that our jobs support,” the letter said.
The airline industry in the United States is heavily unionized. Democrats have longstanding and deep union ties, with union members forming a critical Democrat constituency. That relationship may be underpinning the Biden administration’s willingness to keep providing payroll support through 2021.