American Airlines, United to Cut 32,000 Jobs as Washington Debates Relief - WSJ
American says it will bring workers back if lawmakers approve an extension of aid to airlines
American Airlines Group Inc. and United Airlines Holdings Inc. will go forward for now with a total of more than 32,000 job cuts Thursday after lawmakers were unable to agree on a broad coronavirus-relief package, the airlines told employees.
The airlines’ moves put more pressure on lawmakers who have negotiated on and off for months over an aid package that could include relief for airlines and other hard-hit industries like restaurants and small businesses. Both carriers said they would bring workers back if a deal is reached in the next few days.
“We implore our elected leaders to reach a compromise, get a deal done now, and save jobs,” United said Wednesday night. The airline said over 13,400 employees will be out of a job starting Thursday.
American, which has planned deeper cuts than any other carrier, also told Treasury Secretary Steven Mnuchin that it will bring its 19,000 workers back if lawmakers can approve more aid in the next few days, Chief Executive Doug Parker told employees in a letter. Airlines considered postponing their cuts—something Mr. Mnuchin urged them to do earlier Wednesday.
But Mr. Parker said too much uncertainty remained.
“I am extremely sorry we have reached this outcome. It is not what you deserve,” he wrote to employees.
Conditions attached to airlines’ $25 billion in earlier government aid—approved as part of a broad economic package passed in March—had largely insulated their workers from the effects of deep declines in travel.
That aid was meant to help airlines manage through what they hoped would be a temporary crisis without resorting to mass layoffs. While air-travel demand has climbed from the depths it reached in April, it remains nearly 70% lower than a year ago. Analysts forecast that U.S. airlines will lose $30 billion this year, according to FactSet data.
So while tens of thousands of workers opted to retire early or took buyouts as airlines scrambled to cut spending, most have been able to stay in their jobs until now.
Airlines have raised billions of dollars from capital markets and in some cases from additional government loans, and are in little danger of imminently running out of money. But they say they don’t want to pay workers they don’t need while they are burning through millions of dollars a day and flying a fraction of their usual schedules.
Airlines and their labor unions have lobbied aggressively for another $25 billion to pay workers for another six months, and continued the push into the final hours of negotiations on Wednesday.
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