MIAMI – Executives from United (UA) and American Airlines (AA) announced plans Tuesday to bring back thousands of their furloughed employees. Congress passed its new Covid-19 relief bill this week, which includes US$15bn for US airlines.
The new legislation provides an amendment to the Payroll Support Policy of the airline industry, which sets aside the new amount in aid to bring back more than 32,000 workers of UA and AA who were furloughed in September. The companies state that the additional funds are adequate to pay those employees until March 31.
United CEO Scott Kirby and President Brett Hart said in a Tuesday morning letter that their organization plans to restore “temporary employment” to thousands of their out-of-work staff.
The new bill was praised by union Association of Flight Attendance-CWA, which represents almost 50,000 flight attendants working for 20 US airline. On her part, AFA International President Sara Nelson said the union representatives have spent the last three months sending thousands of phone calls and letters to lawmakers and organizing events in 24 cities in support of the measure.
“This wouldn’t have been possible without the incredible solidarity of Flight Attendants, our entire union, and industry,” Nelson wrote Tuesday in a letter to union members. “This is just a down payment on what’s needed for recovery,” she added. “We need everyone ready to fight forward.”
A Lukewarm Solution for an Ailing Industry
Both AA and UA are burning between US$25m and US$30m on a daily basis but each has liquidity of more than US$15bn.
While UA has said it would recall its laid-off staff, it also believed the market situations would not change. In other words, layoffs will come once the relief deadline expires in March.
Regarding Delta Air Lines (DL), George Ferguson, a Bloomberg Intelligence analyst, expects the carrier to get US$3.3bn from the relief package, which, he notes, “would increase the staying power of the carrier. The grants would add US$16.5bn in liquidity to our year-end expectation.” While DL did not lay off any workers, it did decrease its workforce through buyouts and voluntary unpaid leaves.
According to the AFA, the new stimulus package also extends the previous measure’s cap on executive pay and bans stock buybacks. UA’s Kirby noted that the jobs of the recalled employees would still remain temporary. According to a CNN report, Kirby pointed out that, thanks to Covid-19, the relief bill does not change the business problems the industry still faces.
“We don’t expect customer demand to change much between now and the end of the first quarter of 2021,” Kirby added. “The truth is, we just don’t see anything in the data that shows a huge difference in bookings over the next few months.”
Will Airport Workers Be Left Behind?
According to UNITE HERE, the union representing more than 45,000 airport, hotel, gaming, food, manufacturing, clothing, distribution, laundry and transportation employees in the US and Canada, it is still unknown if airport concession workers would benefit from this legislation. According ti CNN, more than 75% of union members remain out of work.
A UNITE HERE spokesperson told CNN that the new stimulus bill came “too little, too late,” adding that funding allocated for airport includes US$200m for rent relief to airport concessionaires, which includes food and retail businesses but does not appear to contain any worker protection.
The spokesperson told CNN via email, “It is our hope that these new conditions will ensure that these subcontractors utilize these funds as they are intended: to help workers.”
What back to Work Means for Airline Employees
As a result of the pandemic, airline traffic, as everyone knows, is down by two-thirds. The number of scheduled flights has been decreased by more than 40% worldwide. A good number of those flights still operating are mostly half empty. For instance, DL does not book any middle seats to preserve social distancing.
Bringing back laid-off airline staff is not going to change any of those stark facts, and a full recovery of the industry is forecasted to come sometime in 2024. What’s more, as Ferguson points out, without the new Covid-19 relief, the big US carriers still have enough money to get them by 2022. Regardless, come March 2021, US airlines’ staff can expert to be furloughed once more.
Featured image: United Airlines: Photo: Luke Ayers