US airlines commence mass furloughs with no state funding

Following the failure of the US lawmakers to extend the Payroll Support Program (PSP) beyond the September 30, 2020, deadline, multiple carriers launched mass furloughs affecting thousands of workers. The largest cuts were effected by American Airlines (AA, Dallas/Fort Worth) and United Airlines (UA, Chicago O’Hare), which sent furlough notices to around 19,000 and 13,000 workers, respectively. The number of furloughs for American Airlines includes staff of its subsidiaries Envoy Air (MQ, Dallas/Fort Worth), Piedmont Airlines (PT, Salisbury), and PSA Airlines (OH, Dayton James M. Cox). Alaska Airlines (AS, Seattle Tacoma Int’l), which previously warned of up to 3,000 furloughs, so far sent notices to around 450 staff members. In a message to staff reported by public broadcaster NPR, American Airlines Chief Executive Doug Parker said that talks about the extension of the PSP were ongoing, signalling a potential reversal of the furloughs. “I spoke late today with the Secretary of the Treasury Steven Mnuchin. He informed me that the White House and Speaker Nancy Pelosi are continuing to negotiate on a bipartisan COVID-19 relief package that would include an extension of the PSP and it is possible they could reach an agreement in the coming days,” Parker wrote. Among the wave of furlough notices, Southwest Airlines (WN, Dallas Love Field) and Delta Air Lines (DL, Atlanta Hartsfield Jackson) reaffirmed their commitment to avoid any involuntary layoffs. The two carriers also decided not to take state aid from the federal government in the form of term loans. Spirit Airlines (NK, Fort Lauderdale Int’l), Frontier Airlines (F9, Denver Int’l), JetBlue Airways (B6, New York JFK), and Mesa Airlines (YV, Phoenix Sky Harbor) also reached internal agreements with unions to avoid furloughs. However, even the airlines planning no immediate involuntary furloughs expressed their hope that the PSP would be extended. “The company remains hopeful Congress will extend the Payroll Support Program to further protect its employees, and their families should the pandemic continue to have a negative impact on air travel demand into 2021,” Mesa Airlines said.