Airlines, facing a painfully slow recovery, begin furloughing thousands
When Congress gave passenger airlines a $50b bailout in March, industry executives hoped the aid would tide them over until the fall, when more people might be traveling and a vaccine might be closer at hand. Several months later, that hopeful future remains extremely murky. With no recovery in sight and negotiations over another stimulus package at an impasse, United and American Airlines on Thursday began furloughing more than 32,000 workers. The companies said they would reverse the cuts if Congress and the Trump administration reached an agreement to extend more aid to the industry, but there has been little or no progress in those talks. “I am extremely sorry we have reached this outcome,” Doug Parker, American’s CE, told employees in a letter late Wednesday. “It is not what you all deserve.” Airlines were prohibited by the March stimulus law from undertaking major cuts to where they fly and who they employ until Oct. 1. For months, unions have lobbied lawmakers for more money to postpone the day of reckoning, arguing that airlines are crucial to the economy. The campaign worked, but only to an extent. A bipartisan majority of lawmakers in the House of Representatives, at least 16 Republican senators and President Trump said they would be willing to offer another lifeline to the industry. But the effort stalled as Congress and the administration remained deadlocked on a broader aid package. The Trump administration has for weeks been exploring ways to help the industry unilaterally, through executive actions or by repurposing unused money from the previous relief legislation. But officials have concluded that those options were not feasible. In theory, airlines could apply for some of the unused funds set aside for companies that are critical to national security, but the Department of Defense would have to certify that use and the money could come with onerous repayment terms. Even if the definition of national security were interpreted to include passenger airlines, it is not clear how quickly such funds could be disbursed and if the companies would be comfortable with the terms.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2020-10-02/star/airlines-facing-a-painfully-slow-recovery-begin-furloughing-thousands
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Airlines, facing a painfully slow recovery, begin furloughing thousands
When Congress gave passenger airlines a $50b bailout in March, industry executives hoped the aid would tide them over until the fall, when more people might be traveling and a vaccine might be closer at hand. Several months later, that hopeful future remains extremely murky. With no recovery in sight and negotiations over another stimulus package at an impasse, United and American Airlines on Thursday began furloughing more than 32,000 workers. The companies said they would reverse the cuts if Congress and the Trump administration reached an agreement to extend more aid to the industry, but there has been little or no progress in those talks. “I am extremely sorry we have reached this outcome,” Doug Parker, American’s CE, told employees in a letter late Wednesday. “It is not what you all deserve.” Airlines were prohibited by the March stimulus law from undertaking major cuts to where they fly and who they employ until Oct. 1. For months, unions have lobbied lawmakers for more money to postpone the day of reckoning, arguing that airlines are crucial to the economy. The campaign worked, but only to an extent. A bipartisan majority of lawmakers in the House of Representatives, at least 16 Republican senators and President Trump said they would be willing to offer another lifeline to the industry. But the effort stalled as Congress and the administration remained deadlocked on a broader aid package. The Trump administration has for weeks been exploring ways to help the industry unilaterally, through executive actions or by repurposing unused money from the previous relief legislation. But officials have concluded that those options were not feasible. In theory, airlines could apply for some of the unused funds set aside for companies that are critical to national security, but the Department of Defense would have to certify that use and the money could come with onerous repayment terms. Even if the definition of national security were interpreted to include passenger airlines, it is not clear how quickly such funds could be disbursed and if the companies would be comfortable with the terms.<br/>
