Airlines Could Lay Off Thousands Of Employees This Week As Stimulus Deadline Passes

( Later this week, thousands of airline workers could be out of a job if the industry doesn’t get additional help from the federal government.

On October 1, U.S. airlines are free to lay off workers if they need to. As part of the CARES Act Congress passed back in March, airlines received $25 billion in the form of grants to help their fledgling companies. Part of that deal was that the airlines couldn’t lay off any employees through September 30.

Now, with no new deal in place, the airlines say they are going to be forced to make tough staffing decisions as their bottom lines have been dramatically affected by the coronavirus pandemic.

There does seem to be some optimism among the industry for future aid, though. Sara Nelson, the president of the Association of Flight Attendants, said:

“We are hearing that any overall coronavirus relief bill, our payroll support extension, will be included no matter what. There is tremendous bipartisan support.”

Nelson actually thinks the fact that there is a hard deadline of October 1 could prove to be beneficial to the airline industry. She explained:

“Because it is a hard deadline of October 1, and oftentimes Washington or any negotiators need a hard deadline.”

Both parties have included more relief for the airline industry in their latest economic relief packages. Democrats included an extension of the Payroll Support Program, what they are calling PSP2. Republicans have also proposed an extension that would total $28 billion.

The concern now, though, is that negotiators aren’t expected to resume talks on a stimulus package until Tuesday at the very earliest. That could leave many people very concerned about the future of their job.

American Airlines has said that it plans to lay off approximately 20,000 workers. United Airlines is expected to furlough about 16,000 of its employees.

Two other airlines, Delta and Southwest, have said they’ll avoid most layoffs through the end of 2020, but may have to institute furloughs sometime in 2021.

Those layoffs and potential furloughs don’t count any employees of the industry who have taken a leave of absence voluntarily to help their companies.

“And we’re really much more over 100,000 people who are going to be living without a paycheck. We’ve done some things to try to keep some benefits in place, but this is unraveling,” Nelson said.

Delta currently has about 75,000 employees, which is down from the 90,000 it had before the coronavirus pandemic. The company also said about 40,000 workers have taken a leave of absence of some length during the pandemic.

In a regulatory filing it gave last month, American Airlines said they “will have at least 40,000 fewer people working October 1 than we had when we entered this pandemic.”

United Airlines stated in its last earnings report that 6,000 of its workers took a voluntary separation package that included continuous pay and flight benefits through November 30.

Nelson talked about the effect of all these employee separations:

“So, there’s going to be smaller airlines. But we’re going to recover. We just need a period of time where we can get six months closer to a vaccine, six months closer to a testing regimen.”