Two of the nation’s largest airlines said tens of thousands of workers again could face furloughs as demand for air travel continues to lag amid the slow rollout of coronavirus vaccines and new testing requirements for international travelers.
American Airlines said Wednesday that it will send notices to 13,000 employees. Last month, United Airlines notified 14,000 employees that they could be furloughed. Hawaiian Airlines recently sent notices to 800 workers.
In a joint letter to employees, American Airlines chief executive Doug Parker and President Robert Isom wrote that air travel demand has failed to rebound. American will operate 45 percent fewer flights in the first quarter of 2021 compared with the same time period in 2019, they said. The airline also doesn’t expect to operate all its aircraft this summer as it previously had hoped.
“We are nearly five weeks into 2021, and unfortunately, we find ourselves in a situation similar to much of 2020,” Parker and Isom wrote. “As we closed out last year with the successful extension of the Payroll Support Program (PSP), 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.”
Not all of those who receive notices are likely to be furloughed, but the 60-day notice is required before cutting jobs. There also is hope among airlines that money to extend the Payroll Support Program, created as part of the original Cares Act, will be included in the coronavirus relief package being negotiated on Capitol Hill.
Unions are backing a proposal that would provide $15 billion in payroll support to keep workers on the job through the end of September.
At a Thursday hearing before the House Transportation and Infrastructure Committee, Sara Nelson, international president of the Association of Flight Attendants-CWA, told lawmakers the program is among “the best use of the public’s money” because it goes directly to front-line workers. Allowing it to expire, she said, would be a mistake.
“When we lose our jobs, our qualifications, it takes a long time for the airlines to get back up and running again and have [them] in place to be able to support vaccine distribution and everything else that our communities count on,” Nelson said.
Several lawmakers on the panel, including Chairman Peter A. DeFazio (D-Ore.) and Rep. Rodney Davis (R-Ill.), voiced support for an extension.
Support for the program was not included in President Biden’s $1.9 trillion rescue plan. However, officials said Thursday that the administration has not ruled out the possibility it could be extended.
The aviation industry has been among those hit hardest by the pandemic, with ongoing travel restrictions, quarantines and waves of infections repeatedly dashing hopes for a turnaround. Many experts say it could take two or three years for the industry to recover.
According to the International Air Transport Association, a trade group that represents 290 carriers worldwide, airlines lost $118 billion in 2020. Passenger demand for air travel was down 65.9 percent compared to 2019, the association said. U.S. carriers alone lost more than $34 billion last year.
Airlines have made deep cuts, with tens of thousands of workers leaving the industry, either voluntarily or through layoffs. According to Airlines for America, between March and November last year, employment at U.S. carriers fell by more than 93,000 full-time-equivalent jobs.
Airlines have received more than $60 billion in grants and loans from the federal government during the pandemic. The original $2 trillion Cares Act, passed in March, provided $50 billion in support for carriers. Of that, $25 billion went to keep front-line workers on the job through the end of September.
Efforts to pass an extension before it expired stalled amid disagreements over other elements of the relief package. As a result, tens of thousands of airline employees were furloughed.
However, Congress and the Trump administration reached a deal in December that provided $15 billion for airlines and $1 billion for contractors while extending the program through March 31.
At the time, airline executives, buoyed by news that the Food and Drug Administration had cleared two vaccines, were optimistic that passenger demand would rebound. But a slow vaccine rollout and other factors, including new requirements that international travelers to the United States show proof of a negative coronavirus test, have only served to depress travel demand, executives say.
“The extended federal Payroll Support Program for airlines has allowed United to welcome back thousands of co-workers this winter, providing an important boost for them and for our airline,” United Airlines said in a note to employees. “Since the start of the pandemic, we’ve worked hard to stay ahead of the devastating impact of COVID on our business, but unfortunately, the crisis isn’t over.”