American Airlines will begin furloughing 19,000 employees on Thursday after lawmakers and the White House failed to agree on a broad pandemic-relief package that includes more federal aid for airlines.
CEO Doug Parker said Wednesday night that if Washington comes up with a deal for $25 billion in airline aid “over the next few days,” American will reverse the furloughs and recall the employees.
The move by American represents the first — and likely the largest — involuntary jobs cut across the industry in coming days. United Airlines has indicated it could furlough nearly 12,000 workers.
Airline employees and executives made 11th-hour appeals this week to Congress and the Trump administration to avert furloughs when a federal prohibition on layoffs — a condition of an earlier round of federal aid — expires Thursday.
The passenger airlines and their labor unions are lobbying for taxpayer money to pay workers for six more months, through next March. Their request is tied up in stalled negotiations over a larger pandemic-relief measure.
Industry officials acknowledged that prospects were bleak for action before Thursday’s deadline. They said, however, they were cheered that the House this week included airline payroll help in a $2.2 trillion relief plan that moved closer to Republicans’ preference for a lower price tag.
The industry has been grounded by COVID-19 as people stay close to home for work and play. DePaul University Professor Joe Schwieterman said airlines are facing scary red ink and the rebound will take a while.
“We’re still only 35% to 40% of normal and airlines just can’t support that payroll,” he said. “Tens of thousands of layoffs are inevitable it appears without something dramatic coming from congress. Not looking real good right now.”
Leaders of the Air Line Pilots Association and the association of flight attendants urging lawmakers to extend funding through next March saying if Congress fails to act there will be a wave of unemployment with thousands of aviation jobs disappearing overnight.
“Now that we’re looking at it in the face. Congress is feeling pressure, labor groups feeling pressure to negotiate, tough couple of days for the airlines as they try to sort his all out,” Schwierterman said.
There is still some hope furloughs and layoffs could be avoided. Earlier, Treasury Secretary Steven Mnuchin urged airline executives to delay any cuts while he works with House Speaker Nancy Pelosi to hammer out a deal on a new stimulus package.