Perhaps, for many any airlines employees the date October 1 is their worst career nightmare. Here is why? In March $25 billion in U.S. government stimulus funds went to U.S. passenger airlines. The money was to cover payrolls and to secure the jobs of hundred of thousands in the airline industry through the end of September.
However, on October 1 the government stimulus runs out and provides no further protections against job cuts. The airlines responded with warnings of massive layoffs as they continue to lose money due to the worldwide ongoing coronavirus pandemic. To save they have to downsize their operations significantly including laying off staff deemed redundant.
The U.S. Airlines
There were conditions by which the U.S. airlines received the government bailout. Under the coronavirus relief law, also known as the CARES Act, prohibited the airlines from carrying out involuntary furloughs, staff layoffs, and pay cuts.
As early as June the airlines sounded the alarm of the expiration of the CARES Act protection. In a memo sent to staff on June 26, Delta Air Lines informed of 2558 pilots that can lose their jobs and another 7900 eligible employees will be expected to take early retirement. Delta has already reach an agreement with the union representing its pilots that the leave under the agreement will be no later than January 1st of 2022.
In early July United Airlines executives announced that company will be sending notices of layoffs to 36 000 of its staff. The number of 36 000 can reach only in the worst possible scenario, according to the airlines. Similar to Delta, United also intents to offer early retirement to qualifying employees to avoid the layoffs.
The situation with American Airlines is not much different. For this fall travel season the airline expects to have as many as 20 000 more employees then it really needs because of the slow passenger demand. In mid-July American representatives sent out a warning that as many as 25 000 workers may need to go. Among them flight attendants face the biggest cut of 10 000.
At other U.S. airlines the situation is similar if not worse. For example, Hawaiian Airlines is one of the hardest hit by the effects of the coronavirus pandemic as traveling to the Hawaiian islands has stalled.
In a video message the Hawaiian Airlines president and CEO, Peter Ingram, announced that nearly 820 flight attendants and 173 pilots will be let go as big portion of it will be involuntary.
“[…] I haven’t seen anything in that time that compares to the way that this pandemic has hobbled our business,” he said. “We’re forced to take steps now that just a few months ago were unthinkable. I’m sure for many of you there is sadness, some disbelief and anxiety for the future. I share those emotions and more.”, Ingram said in the video message to its employees.
At this time travel to the US state of Hawaii is almost non existent at 93% below for the same period of last year, Airlines for America reports. Hawaii’s economy like many other island destination relies solely on holiday travelers.
Airlines try what they can to minimize the number of involuntary employees departures by offering early retirement options to those eligible. However, many laid off employees will end up collecting unemployment for the foreseeable future unless the government doesn’t step in again.
Possible U.S. government help
“We’ll be helping the airlines. You have to help the airlines…” This what the U.S. President Donald Trump said recently to reporters on his way to Kenosha, Wisconsin. However, the President did not give any specifics.
According to the White House Chief of Staff Mark Meadows the administration of the President is considering executive actions to avert the possible big layoff at the U.S. airlines had Congress fails to negotiate another economic stimulus package.
Currently, such package is at halt as democrats and republicans cannot agree on its terms.
As October 1 approaches airlines have become more vocal of the cuts they plan which even outnumber what they previously announced.
For example, American Airlines announced last week that it will have to reduce its workforce by 40 000 employees which is double of what American previously said had not the government provide another employee payroll protection stimulus.
At the end of August United Airlines also warned of the need to cut 2 850 pilots between October 1 and November 30 had the U.S. government doesn’t come to the rescue.
However, as the coronavirus pandemic has no ending in sight providing an on-going U.S. stimulus protection to the airline industry may turned to be a lost battle against time.
The current airline employment market is grim as no commercial airlines are hiring. The situations is similar across the board in the industry. Pilots and flight attendants who once enjoyed their work traveling the world now have to face a different reality.
The world economy is projected to continue to shrink further. According to Airlines for America, the U.S. airlines passenger volume for week ending on August 23 still remains 70% below year-ago levels while international travel remains 87% below year-ago levels. Restrictions and passenger confidence on travel are still very low.
Airlines for America predicts that it is unlikely to see a return to 2019 passenger levels before 2023-2024.