Airline Furloughs Begin as Congress, White House Remain at Impasse

Discussion:

Madhu Unnikrishnan

More than 30,000 airline employees face furloughs today after the CARES Act payroll support program expired yesterday. Washington remains deadlocked on further airline aid, although there is bipartisan support for extending the program.

In a letter to employees, American CEO Doug Parker said the airline will begin the process of furloughing 19,000 employees today. United said it will begin the process for more than 13,000 employees. Both airlines said they will recall affected workers if the payroll support program is extended. Several regional airlines have said they also have begun the process.

Enough Delta has reduced its workforce enough through voluntary separation and leaves of absence to avoid furloughing front-line employees. The carrier said it will delay planned pilot furloughs until November 1 while its pilots union weighs a deal to avoid reductions in force. Southwest has said it does not expect to have any involuntary furloughs this year.

The political climate remains uncertain and deadlocked. Although lawmakers from both parties have expressed support for extending airline aid through March 2021, no consensus has been reached. House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin have met several times this week to hammer out a coronavirus relief package. The House was set to vote on the $2.2 trillion HEROES Act, which contained more than $25 billion for airlines, but Pelosi pulled the bill from a vote yesterday to provide more time to reach a more bipartisan agreement.

The White House is said to favor $20 billion in further airline aid in its proposed $1.6 trillion coronavirus-relief package. Senate Republicans, meanwhile, are lukewarm about any bill north of $1 trillion, and it remains to be seen if Mnuchin and Pelosi can reach a deal that could pass the Senate. A standalone bill introduced by Senators Roger Wicker (R-Miss.) and Susan Collins (R-Maine) that would provide $28 billion in airline support has not come up for a vote.

If talks with the White House fail to produce a deal, Pelosi has signaled the House will vote on the HEROES Act as early as today, and if it passes, it will go to the Senate. Majority Leader Mitch McConnell has said the House bill is not likely to receive enough votes in the upper house.

The fact that talks are ongoing is small comfort to the tens of thousands of airline workers who face unemployment in the coming days. The Air Line Pilots Association (ALPA) said it was “disappointed” that Washington failed to reach a deal before the September 30 deadline. “ALPA strongly encourages all parties to continue negotiating toward a coronavirus relief package that will help stabilize the airline industry and protect frontline aviation workers” President Joe DePete said.