Layoffs loom for beleaguered US airline industry

American and United airlines were the first to announce cuts, saying they would begin furloughing 19,000 and 13,000 workers respectively

NEW YORK • Workers from the beleaguered US airline industry were making a last-ditch public appeal this week to coax more money from Capitol Hill power brokers to save their jobs.

The first day of October concludes the period when US carriers that received billions in aid from Congress promised to refrain from laying off workers.

American Airlines Inc and United Airlines Inc were the first to announce cuts, saying they would begin furloughing 19,000 and 13,000 workers respectively as US officials failed to reach a deal on fresh aid to the pandemic-hit air travel sector.

A package of loans totalling up to US$25 billion (RM103.7 billion) to seven US carriers announced on Tuesday night by the Treasury Department provides funds for airlines to ride out a prolonged downturn amid Covid-19, but won’t affect plans for furloughs, airline sources said.

Treasury Secretary Steven Mnuchin said on Wednesday on CNBC he was hopeful airlines would postpone layoffs if congressional leaders can reach a framework for a deal, saying it was “critical” for Congress to act.

While the stalemate in Washington over stimulus has pinched unemployed workers and put public sector employees on notice, vulnerable airline workers have in some ways been the poster children for the impasse.

“Tomorrow, tens of thousands of essential aviation workers will wake up without a job or healthcare and tens of thousands more will be without a paycheque,” Sara Nelson (picture), president of the AFA-CWA flight attendant union, said in a statement.

House Speaker Nancy Pelosi and Mnuchin held talks again on Tuesday and agreed to keep negotiating. But a deal is still far from assured.

Since the coronavirus intensified in March, US airlines have been grounding planes and delaying jet deliveries to limit their cash-burn as air travel remains at about only one-third of its level a year ago.

Carriers have struck agreements with unions to spread out work among employees. Tens of thousands of employees have also accepted unpaid leave or early retirement packages to avert the need for involuntary terminations.

Still, the decisions will not be enough to avert all job cuts. Airlines have said they do not expect a full recovery until a vaccine is widely available, which company executives have said may not be until late 2021.

Unions have said 100,000 people or more could be laid off without additional federal aid, but analysts

expect a smaller number than that as airlines and unions seek ways to avoid layoffs.

In one such deal, United Airlines on Monday reached an agreement with its pilots union to avert furloughs of 2,850 employees.

Flight attendants and staff in other airport operations are among the 13,000 being laid off.

Southwest Airlines Co has said it does not plan involuntary job cuts. The Delta Air Lines Inc pilot union last week said it reached an agreement with the company to avoid furloughs until at least Nov 1 to give congressional talks more time.

Delta has said earlier voluntary staff departures and union agreements averted the need for involuntary job cuts for flight attendants and other frontline employees.

Peter McNally, an analyst at research firm Third Bridge, predicted there would be significant downsizing throughout the industry. — AFP