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Airlines warn of new furloughs without more federal aid

Airlines warn of new furloughs without more federal aid
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Federal aid for airlines is set to expire at the end of next month, prompting companies to warn of massive layoffs as they fight to secure what would amount to a third round of government support since the pandemic began. 

American Airlines and United Airlines say they plan to furlough a combined 27,000 workers on April 1, with other carriers sure to follow.

Efforts by unions and companies to secure more funding will test the willingness of lawmakers and the Biden administration to provide more industry-specific support at a time when other sectors have not received the same level of financial backing from Washington.

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The Payroll Support Program, which was first passed as part of the CARES Act in March, was last extended in late December, but not after a lapse in October led to tens of thousands of industry layoffs. Airlines agreed not to layoff workers while receiving the funds.

“We are nearly five weeks into 2021, and unfortunately, we find ourselves in a situation similar to much of 2020,” American Airlines said in a memo to employees this past week.

For the week starting Jan. 31, revenue from airline bookings was down 82 percent compared to the same week in 2019, according to data from the trade group Airlines for America. There were also 66 percent fewer passengers on U.S. airlines in 2020 compared to the previous year.

The first round of airline aid last year was $25 billion, with a second round amounting to $15 billion. The funds also came with restrictions. 

“We did the opposite of what a normal corporate bailout would do. We capped executive compensation and banned stock buybacks. So, it was workers first all the way around. It saved jobs, kept us connected to our health care, and all of the things that we need to continue for the rest of our working lives — Social Security contributions, contributions to our retirement and pensions,” Sara Nelson, international president of the Association of Flight Attendants-CWA, told lawmakers at a House hearing on Thursday.

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Airlines for America is also a strong proponent of more funding for the payroll assistance program.

"We strongly support the call from aviation union leaders to extend the successful Payroll Support Program, which has been vital to preserving the jobs of our hardworking employees – flight attendants, pilots, mechanics, gate agents and others," said Nicholas E. Calio, the trade group's president and CEO.

But President Biden’s $1.9 trillion coronavirus relief proposal that’s making its way through Congress does not include targeted assistance for airlines, and the White House has signaled it’s unlikely to push for additional provisions.

When asked Thursday whether Biden supports giving more aid to airlines in the relief bill, White House press secretary Jen PsakiJen PsakiOvernight Defense: Administration says 'low to moderate confidence' Russia behind Afghanistan troop bounties | 'Low to medium risk' of Russia invading Ukraine in next few weeks | Intelligence leaders face sharp questions during House worldwide threats he Overnight Health Care: Johnson & Johnson delay prompts criticism of CDC panel | Pfizer CEO says third dose of COVID-19 vaccine 'likely' needed within one year | CDC finds less than 1 percent of fully vaccinated people got COVID-19 Hillicon Valley: Biden administration sanctions Russia for SolarWinds hack, election interference MORE responded, “I think the president’s priorities are already in the package.”

Biden’s coronavirus relief package might not pass until mid-March, leaving little time to avoid April 1 furloughs if the PSP doesn’t end up in the final relief bill.

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Lawmakers on both sides of the aisle have indicated there’s still room to include aid for airlines in the relief bill that’s being crafted via the budget reconciliation process.

Senate Commerce, Science and Transportation Committee Chairwoman Maria CantwellMaria Elaine CantwellAgainst mounting odds, Biden seeks GOP support for infrastructure plan The Hill's 12:30 Report: Biden meets with bipartisan lawmakers for infrastructure negotiations Senate Republicans label Biden infrastructure plan a 'slush fund' MORE (D-Wash.) said Thursday that she supports working toward an extension of the Payroll Support Program (PSP) in the coronavirus measure.

“Congress has twice acted to provide critical relief to airline workers, pilots, mechanics, flight attendants, and we will continue to do so as part of this budget reconciliation,” Cantwell said on the Senate floor. “As I mentioned, avoiding furloughs keeps highly skilled pilots and crew members trained and ready to go as part of the transportation sector.”

Other Democrats have signaled they might take legislative action separate from Biden’s bill.

“Congress is an independent entity, so we are going to accomplish his goals and some of our own," said Rep. Peter DeFazioPeter Anthony DeFazioThe Hill's Morning Report - Presented by Tax March - US vaccine effort takes hit with Johnson & Johnson pause Pelosi wants Biden infrastructure bill done by August The Hill's Morning Report - Biden: Let's make a deal on infrastructure, taxes MORE (Ore.), chairman of the House Transportation and Infrastructure Committee.

“I support a PSP extension. The transportation systems in our country — including airlines, but also airports, public transit, the motor coach industry and others in my Committee’s jurisdiction — have all been hammered by the COVID crisis, and the last thing we need is millions of transportation workers out of work and in the unemployment lines,” he said in a statement to The Hill.