Airlines, unions push for billions in additional federal aid to save airline jobs as layoffs loom

Key Points
  • Airlines received $32 billion in federal payroll support in the $2.2 trillion CARES Act.
  • The aid prohibits job cuts through Sept. 30 but a rebound in demand hasn't materialized.
  • Airline labor unions in June began pushing for an extension of $32 billion in aid to preserve jobs.

In this article

An airline employee walks past empty American Airlines check-in terminals at Ronald Reagan Washington National Airport in Arlington, Virginia, on May 12, 2020.
Andrew Caballero-Reynolds | Getty Images

Airline executives and labor unions are pushing for billions of dollars in additional federal coronavirus aid as the threat of layoffs this fall looms for employees and Congress debates a new aid package to help the country to weather the pandemic.

Congress set aside $32 billion for the ailing airline sector in the $2.2 trillion CARES Act in March on the condition that recipients didn't cut jobs or pay rates through Sept. 30. The measure intended to buy the airlines and their workers time on the hope that demand recovered.

But despite a late-spring and early summer uptick from lows hit in April, executives have warned that demand growth stalled as coronavirus cases spiked and states like New York ordered incoming travelers to quarantine on arrival.

Airline ticket sales last week were down 79% from the same period in 2019, roughly in line with the previous week, according to the Airlines Reporting Corp., which processes tickets sold by travel agencies. Sales from the usually lucrative corporate segment were down 90%.

Airline labor unions have been pushing since June for an extension of the $32 billion in payroll support that would preserve sector jobs through the end of March 2021. A majority of House members have supported the extension, but it isn't yet clear whether additional aid will make it into the next package. Congressional leaders didn't immediately comment.

Delta Air Lines CEO Ed Bastian told The Washington Post on Monday that the carrier would support the measure.

American's CEO, Doug Parker, went to Washington last week to discuss the efforts to extend the aid, the company said in an employee town hall, a recording of which was reviewed by CNBC. American declined to comment further.

American Airlines and United Airlines have together warned more than 60,000 employees that their jobs are at risk when the aid terms expire and executives at both carriers have expressed support for their labor unions' push for additional support.

Southwest Airlines is also discussing an extension with lawmakers and Trump administration officials, a spokesman said.

"Just as before, I'm personally involved in delivering that message to our federal leaders," said Southwest CEO Gary Kelly in a message to employees on Friday. Kelly said he is also urging Washington to take other measures to encourage travel again such as a tax break on airline tickets and liabilities protection for businesses.

"Without customers and places and events for them to fly to, we'll never punch our way out of this crisis," Kelly said.

Southwest last month said it doesn't intend to pursue furloughs this year as more than a quarter of its employees signed up for voluntary leaves of absence or early retirement to help cut costs.

Other airlines including Alaska, Spirit and Frontier have also warned employees about potential furloughs in the fall in the past few weeks.

Boeing's delivery of aircraft is a point of concern: Jefferies
Boeing's delivery of aircraft is a point of concern: Jefferies