United Airlines is going to send possible furlough notices to 39% of its employees. Republic Airways is also going to send WARN Act notices to 40% of its staff.
American Airlines CEO has said they have 20% – 30% too many flight attendants and 10%-20% many pilots.
Today American is sending WARN Act notices to about 25,000 employees, but they want those employees to lobby for more federal government subsidies to stay on payroll.
— Ross Feinstein (@RossFeinstein) July 15, 2020
Here’s the money quote on subsidies, which the airline used to lobby against when they thought that was in their interest,
[I]t’s worth noting that each of our unions has expressed support fo rlegislation that would extend the Payroll Support Program funding for six months in light of the much longer impact of the pandemic than was anticipated when the CARES Act was enacted. As currently proposed, the effect of this legislation would be to delay any involuntary furloughs until March 31, 2021, at which point there would most certainly be more demand for air travel, and along with that demand, much less need for involuntary furloughs throughout the industry.
This is a union-led initiative across our industry, but AMerican is supportive of any legislation that would protect our team’s jobs during these extraordinary times. If you are interested in supporting these legislative efforts, we recommend that you work with your union leaders to ensure your voice is heard. That an extension of the Payroll Support Program is being considered illustrates the incredibly important work all of you do every day across our country and globe. Notably each direct airline job supports 13 additional jobs that support our aviation infrastructure and industry.
When I started pointing out that current subsidies ran out September 30, and that would be large layoffs one month before the presidential election, so airlines were posturing for another round of money some of you said I was being paranoid. But it’s not paranoia when they really are out to get you.
Further payroll bailouts harm the economy by delaying labor moving into new industries.
Doug Parker shared in an internal employee meeting last month that in the best case scenario next summer – long after March 31, 2021 – the airline will still be 10% – 20% smaller and need fewer employees and that’s “Assum[ing] a world where there’s a vaccine and everybody’s flying again and no one even remembers what coronavirus means next summer.”
So another round of bailouts will just delay layoffs. But those bailouts in the meantime pay not just for employees who would have been laid off, up to 40% in the scare numbers at some airlines, but for employees that remain on the books and that’s not even accounting for those who go on voluntary leave or take buy outs. In other words, an extension of the Payroll Support Program will stick money in the till of the airline even beyond payroll, bailing out equity holders and bondholders, without even saving all the jobs at stake.