The End of Government Funding Led to Massive Furloughs
At midnight of October 1, both American Airlines and United Airlines began the furlough of over 32,000 employees after talks for a hopeful COVID-19 aid package fell apart in Washington.
October 1 was the agreed end date for the $25 billion payroll grants that were established under the CARES Act, which affected most of the largest U.S. carriers who applied for the care packages– American, Delta, United, Southwest, Spirit, JetBlue, Alaska.
Workers were informed that American Airlines “will begin the difficult process of furloughing 19,000 of our hardworking and dedicated colleagues,” according to CEO Doug Parker, which places nearly 14% of the airline’s pre-COVID-19 staff out of work.
Hope for Airline Workers
Airline companies tried to cut costs and salaries to try and make ends meet, following the government’s handout of grants. However, air travel still has not bounced back as consumers are still anxious to go on flights even with extra safety measures, such as cranking up the ventilation and taking out middle seats, were being implemented.
The result showed a 75% decrease in passenger loads over the summer and industry-wide losses of more than $400 billion.
Airline executives stated that air travel may yet return to normal, but they don’t see it happening soon and has gone on to say that this blow to the aviation industry is more serious than after 9/11. According to Delta Airlines CEO Ed Bastian, “We are confident that people will begin to travel again. We don’t know when it will happen, but we do know that Delta will be a smaller airline for some time, and we should be prepared for a choppy, sluggish recovery even after the virus is contained. I estimate the recovery period could take two to three years.”
However, both American and United Airlines have assured that they are ready and willing to reverse the decision should a stimulus package make it through Congress, without saying as to how long they are willing to wait. PSA Airlines, an American-owned regional carrier, informed pilots that “the furloughs will still occur” if Washington still will not approve another stimulus package by Sunday, October 4.
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