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A Delta Air Lines A319 holds short as an American Airlines A321 departs Los Angeles (Photo: AirlineGeeks | James Dinsdale)

White House Looking to Prevent Airline Industry Layoffs

On Wednesday, the White House stated that it will consider the possibility of taking action to protect thousands of airline employees’ jobs. According to USA Today, this comes the same week American Airlines and Delta Airlines announced they would furlough thousands of union employees each in October.

According to American, an additional $25 billion is needed to last until March 2021. In March of this year, a $2.2 trillion stimulus package was signed by President Donald Trump, $50 billion of which was to be distributed among the airlines to help meet the costs of their employees’ salaries and avoid in-voluntary furloughs along with pay cuts before Sept. 30.

Trump’s chief of staff, Mark Meadows on Wednesday said “if Congress is not going to work, this president is going to get to work and solve some problems. So hopefully we can help out the airlines and keep some of those employees from being furloughed.”

The announcement came as American Airlines announced on Wednesday that it would furlough or layoff 19,000 employees, taking the total number of employees leaving the company on or around Oct. 1 to over 40,000. Eleven thousand had already taken voluntary leave or early retirement packages.

United announced in July that 36,000 of its employees could face layoffs come October, but the airline hadn’t given any more specific figures. Southwest Airlines, on the other hand, had revealed it would hold off on layoffs for the time being as it had seen thousands of employees take its opt-in leave and retirement options

In the March coronavirus-relief package signed by Trump, airlines were prohibited from laying off their employees until Sept. 30 when the grants and cash runs out. With the Sept. 30 deadline a little more than one month away, airlines and their labor unions have increased lobbying efforts.

Support from bipartisan majorities in the U.S. House of Representatives and Senate have already been lined up. Yet, the fate of the proposal is still uncertain as a larger coronavirus-relief package has not been successfully negotiated between the White House and members of Congress.

With just a month to go before the Cares Act’s official deadline, airlines and employees continue to sit in a state of limbo. And as the airline industry continues to see travel stagnate around 30% of last year’s levels, airlines are increasingly looking to a second government bailout package as their best option to keep everyone on their payroll for the time being.

However, any package will likely be wholly unable to address a slump in demand that is expected to extend far into even 2023, with some long-haul travel taking until 2024 to get back into full swing, pull some airlines’ and the International Air Transport Association’s projections. So whether a solution comes or not, it may prove to simply be a small bandage on a much larger wound as the airline industry looks toward a total restructuring in the coming months and years.

This story was updated on Saturday, Aug. 29, 2020 at 10:12 p.m. ET to correct a grammatical error. 

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