MIAMI – US Airlines and labor unions are seeking another US$25bn bailout package, as current job protection under the CARES act is set to expire on October 1. Experts believe an additional 30,000 jobs will be lost if a deal is not secured during the remainder of this month.

The COVID-19 global pandemic has had a historically negative effect on the airline industry. From high case counts to worldwide travel restrictions, the demand for US-based travel has been hit especially hard.

Officials close to the matter believe an additional airline industry bailout will not be passed as a standalone package, but rather, will be inclusive of aide to small-businesses and other travel industry sectors such as hotels and restaurants.

Airlines look to more fuel efficient aircraft as a cost-cutting measure. PHOTO: Luke Ayers/Airways

A Potential Deal


With upwards of 30,000 layoffs and furloughs looming, US airline officials hope to encourage a deal that extends job protection through March 2021. Experts remain split on the timing of industry recovery; however, airlines remain hopeful it will come sooner rather than later.

Airlines continue to burn through large amounts of cash, and a second bailout would prevent extreme cost-cutting measures. Many US-based carriers have already announced retirements of fairly new aircraft, as well as large-scale early-retirements, furloughs and work reductions plans.

While the situation grows increasingly urgent with every passing day, many officials remain cautiously optimistic. Others continue to pin hope on development of a vaccine.

A lineup of United aircraft. PHOTO: Luca Flores/Airways

Self-Help Measures


Delta Air Lines (DL) took a major step this week by announcing guaranteed job security for all its US-based Flight Attendants and operations employees. A loan, backed by DL’s Skymiles loyalty program, made this announcement possible. American Airlines (AA) and United Airlines (UA) have taken similar action and turned their lucrative rewards programs into collateral.

“Despite the aggressive self-help measures the company has taken to bolster its financial position, and even with several thousand of our colleagues opting for voluntary leave and early retirement, nearly 20,000 American Airlines team members are facing furloughs in just two short weeks”, said AA CEO Doug Parker in a letter to lawmakers.

Stretched to their limits, even the largest US airlines are running out of options to self-medicate weekly cash burn. A second bailout may soon be the only option to ensure a financial future for a desperate industry.


Featured Image: An aerial with multiple US-based carriers on display. PHOTO: Luca Flores/Airways

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