Thousands Of Airline Workers Facing Unemployment As Aid Package Stalls In Congress

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The clock is ticking for tens of thousands of pilots, flight attendants, reservation agents and other airline employees, who will likely lose their jobs on Oct. 1 if Congress doesn’t extend federal aid for the airlines.

Andrew Harnik/AP

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Andrew Harnik/AP

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Even with the federal payroll support for the past six months, and tens of thousands of employees taking early retirement or or other incentives to leave their jobs voluntary, the airlines have notified another 75,000 employees that they could be out of work Oct. 1, if the payroll support is not extended.

While the actual number of layoffs probably won’t be that big, even 20,000 to 40,000 people losing their jobs would likely send shock waves through the national economy. And that’s something majorities in both parties in Congress and the president seem to recognize.

«We absolutely cannot let an entire sector of the economy collapse and that’s exactly what will happen if we do not get this extension done, says Missouri Congressman Sam Graves, the ranking Republican on the House Transportation Committee. He and others in the GOP agree with their Democratic counterparts that the six months of payroll grants to the airlines under the CARES act succeeded in keeping airline employees working and off of the unemployment rolls.

‘We’re better than that’

Yet another round of funding for the airlines is stalled because it is tied to broader coronavirus relief that the White House and Democrats and Republicans in Congress cannot agree upon.

American Airlines CEO Doug Parker is angry about that.

«I just can’t believe that we may not be able to do the right thing simply because our elected officials can’t come to any kind of compromise agreement, Parker said at a news conference with labor leaders and other airline CEOs Tuesday. «We’re better than that.

But the airlines themselves are predicting a long and slow air travel recovery, with demand not beginning to pick up significantly until there are widely available coronavirus vaccines and/or treatments. So some wonder if providing billions more in taxpayer-funded relief to the airlines doesn’t just put off the inevitable, as airlines need to become smaller to match the reduced demand.

«You can’t run an airline that’s a third the size it was and expect to keep all the same people, says Helane Becker, managing director and a senior airline analyst for the investment bank Cowen.

She predicts that it may take four years for travel demand to return to pre-Covid-19 levels and for the airlines to recover.

«In this country, I think we’ve shifted from flattening the curve to waiting for a cure or a vaccine and that just means the pain is going to be longer, Becker says.

But with so much uncertainty about when and if there will be an air travel recovery, another round of federal aid may help the airlines adjust to their new normal.

«It gives the industry some breathing room, Becker says. «It gives them an opportunity to continue to work with their employees to try to shrink the footprint.

«It gives them a chance to reset, Becker adds. «And then, hopefully by the next March, April, May time frame, we’re at a point in time where the virus has dissipated enough that people would (begin to) feel more comfortable traveling.

Legislation to extend the payroll support to the airlines was introduced in the Senate this week, but with Congress and the White House still deadlocked over a broader coronavirus relief package, thousands of airline employees may find themselves out of a job as soon as next Thursday.