Airlines grounded: American, United announce furloughs

United and American Airlines announce layoffs and furloughs

American Airlines and United Airlines announced Wednesday that they would begin furloughs and layoffs on Thursday after lawmakers and the White House failed to agree on a relief package that included more federal aid to the struggling industry.

American Airlines CEO Doug Parker said the company will begin furloughs and layoffs for 19,000 workers on Thursday, The Dallas Morning News reported. United Airlines, in a message to its employees, said 13,000 people would be furloughed.

“You are all well aware that tomorrow, Oct. 1, the Payroll Support Program (PSP) under the CARES Act is set to expire,” Parker said in a letter to employees. “As a result, tomorrow, we will begin the difficult process of furloughing 19,000 of our hardworking and dedicated colleagues.”

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“I am extremely sorry we have reached this outcome,” Parker wrote. “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 days ahead.”

The furloughs amount to about 16% of the company’s workforce, the Morning News reported.

“Today is a very sad day for all of us here at United,” United Airlines officials said in a letter to its employees. “After months of aggressive cost-cutting and proactive debt-raising actions to manage the company through the COVID-19 crisis and its impact on our business, we regrettably are forced to move forward with the process of involuntarily furloughing about 13,000 of our United team members.”

The letter went on to say that United officials “haven’t given up.”

Flight attendants make up the majority of United’s furloughs, with 6,939 set to be laid off, CNBC reported.

Chicago-based United had more than halved its projected number of furloughs, which were at 36,000 this summer, the network reported. The airline achieved that through voluntary measures and deals with unions to reduce hours and trim expenses.

The coronavirus pandemic hit the airline industry hard. In March, with the industry on the brink of collapse, Congress passed a $25 billion program to cover payroll costs, The Washington Post reported. The relief package was passed on the condition that airline workers would not be laid off or have their pay cut before Oct. 1, the newspaper reported.

Sara Nelson, the president of the Association of Flight Attendants, said in a statement that the furloughs mean “tens of thousands of essential aviation workers will wake up without a job or health care and tens of thousands more will be without a paycheck.”

“It shouldn’t be this hard to do the right thing,” Nelson added.

Nicholas Calio, president of the trade group Airlines for America, said that Thursday might not be a hard deadline, hinting that airlines could reverse some furloughs if a deal can be struck between the White House and congressional Democrats, The Associated Press reported.

“Ideally, if it’s going to go beyond Thursday they will be close to a deal and say, ‘Hang on for a couple days,’ and we can wait,” Calio told the AP. “Beyond that, the notices have gone and furloughs will go into effect.”

“If there’s a clear and concrete path that says we’re not quite done yet but we will be done soon, of course (we’ll avoid job cuts),” Parker told CNN.