With the expiration of US federal payroll program on September 30, American Airlines Group Inc. and United Airlines are starting to furlough their employees Thursday, that is expected to affect around 32,000 workers in total.
However, the companies in their memos to employees reportedly said they will be recalled if and when the Congress passes another financial lifeline to the airline industry.
American Airlines is set to furlough 19,000 employees, as announced in August. This includes around 1,600 pilots. Meanwhile, United Airlines plans to furlough more than 13,000 employees, but no pilots. This week, United Airlines pilots approved a deal to avoid furlough of thousands of pilots at least until June 2021.
The airlines had received aid under the federal Payroll Support Program or PSP under the CARES Act passed by Congress in March, that banned furloughs. They were hoping for an additional $25 billion in funding to help them maintain their payrolls.
However, Treasury Secretary Steven Mnuchin is yet to reach a deal with the Congress, and it could take more time to win the support to pass the agreement.
Meanwhile, reports said that Mnuchin has urged airlines to delay job cuts as he continue talks on the bill.
In a memo to employees, American Airlines CEO Doug Parker reportedly said that the airline has no choice but to cut jobs after it failed to get more federal aid.
United Airlines CEO Scott Kirby also said in a memo that the decision to cut 13,000 jobs marked a very sad day for all at United. “We implore our elected leaders to reach a compromise, get a deal done now, and save jobs,” Kirby wrote.
In late August, American Airlines had announced plans to cut about 19,000 employees when the US federal aid expires in October. In June, the company had warned around 25,000 employees, which is about 20% of its total workforce, about the possibility of furloughs.
United Airlines in September had announced its plans to furlough 16,370 employees in October. The potential furloughs was fewer than 36,000 jobs loss the airline warned of in July.
The coronavirus pandemic, which continues to wreak havoc on the travel and tourism industry, has impacted employees at many other airlines including Delta Air Lines and Southwest Airlines.
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