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American and United Push Ahead With Employee Furloughs as Federal Payroll Support Dries Up

American and United Push Ahead With Employee Furloughs as Federal Payroll Support Dries Up

Tens of thousands of airline workers will wake up on Thursday newly unemployed after a $25 billion extension to a federal payroll support program failed to materialize. American Airlines will push ahead with plans to furlough 19,000 employees, while United confirmed on Wednesday night that 13,000 team members would be laid off, albeit temporarily after lawmakers failed to agree on a last-minute rescue package.

“Tomorrow, we will begin the difficult process of furloughing 19,000 of hardworking and dedicated colleagues,” an internal memo from American Airlines chief executive Doug Parker read. Parker offered a small glimmer of hope, saying American would be prepared to recall employees if a six-month payroll support extension was passed within days.

The assurance to recall employees came after a meeting with Treasury Secretary Steven Mnuchin where he suggested a deal could be done in the coming days. Mnuchin apparently asked airlines to delay furloughing workers but without success. Staffers have already been ordered to hand back their ID’s.

“I am extremely sorry we have this outcome,” Parker continued. “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 day ahead.”

Initially reluctant to accept more payroll support, airlines have lined up over the last few months and weeks to press lawmakers for a second multi-billion-dollar bailout that would secure jobs for another six months through to the end of March 2021. While there is broad cross-party support for airline industry-specific help, the package is tied up in larger but much-delayed Coronavirus stimulus bill.

“It shouldn’t be this hard to do the right thing,” complained Sara Nelson, president of the Association of Flight Attendants (AFA-CWA). “Flight Attendants have been on the frontlines of the COVID crisis since the earliest days…  Congress has failed to act in time to avoid this furlough cliff,” she continued.

Nelson represents flight attendants at 20 airlines including the crew who make up some of the 13,000 employees at United who will now be furloughed. Sharing a similar message as American Airlines, a spokesperson for United said it hadn’t yet given up on securing a second bailout despite the deadline already passing.

In contrast to the massive lay-offs at some U.S.-based carriers, Delta said wouldn’t need to furlough any flight attendants or ground staff after a significant uptake of voluntary measures. A decision to involuntary furlough pilots has also been pushed back while negotiations continued.

United managed to do deals with pilots to avoid involuntary furloughs but ultimately, the overage of other staff was just too great. Despite some signs of a slight recovery in air travel demand, passenger numbers continue to hover around 30 to 35 per cent of pre-COVID levels.

The International Air Transport Association (IATA) warned of a weaker-than-expected recovery and a “dismal end” to the summer travel period. The trade body now doesn’t believe travel demand will recover until 2024.

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