American Airlines said it will begin furloughing 19,000 workers after lawmakers and the White House can’t agree on a coronavirus relief deal.
The major airlines have held off on layoffs and mass furloughs under the terms of a $25 billion payroll support program Congress passed in March. The deal was aimed at helping the airlines cope with shutdowns, quarantines, and a crash in bookings, but at the time it was passed, lawmakers believed demand for air travel would recover in a few months.
The March legislation’s ban on cutting jobs expires October 1. Demand for air travel has recovered a bit since the depths of March and April, but passenger volume remains 70 percent below pre-pandemic levels.
Airline executives say they simply cannot avoid eliminating jobs and furloughing employees without a new round of relief from Congress.
American Airlines Chief Executive Doug Parker said in a letter to employees that he stood ready to reverse the furloughs if lawmakers reach a deal, according to Reuters.
U.S. Treasury Secretary Steven Mnuchin said on Fox News on Thursday that talks with House Speaker Nancy Pelosi had made progress, but no deal has been reached. Democrats have resisted reaching a deal with Republicans, with some Democratic politicians and strategists worried that any deal to boost the economy might help Trump’s re-election efforts. Some liberal activists oppose any deals with the Trump administration under any circumstances.
Majority Leader Mitch McConnell called a proposed $2.2 trillion coronavirus relief package from the Democrats “outlandish.”
President Trump has told Capitol Hill Republicans that he would prefer a bill that spent more than the earlier Republican proposal that was rejected by Democrats to no deal at all.
Airlines spent the last several months furiously lobbying lawmakers for a second round of $25 billion of payroll support that would avoid job cuts until the end of March.
United has said it will eliminate more than 13,000 jobs if there is no deal.
–The Associated Press contributed to this report.