More than 30,000 furloughs begin as ‘terrible Thursday’ arrives for airlines

Oct 1, 2020

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American Airlines and United Airlines have begun furloughing more than 32,000 staff as the foretold “terrible Thursday” arrives for U.S. airlines.

American began furloughing or laying off 19,000 staff and United 13,342 staff on Thursday after employment protections under the federal coronavirus aid package, or CARES Act, expired on Sept. 30. In addition, American regional subsidiaries Envoy and PSA Airlines began furloughing 1,000 and 1,060 staff, respectively.

Other carriers are also furloughing or laying off staff. Spirit Airlines has furloughed or laid off fewer than 100 staff, a spokesperson confirmed. This brings the total number of airline employees out of work on Thursday to at least 34,592 people.

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“Today is a very sad day,” Chicago-based United told staff in a memo late on Sept. 30. It’s a sentiment that is likely widely shared across the industry.

The furloughs come as Congress failed to reach an agreement on extending the payroll protection program for airline employees before the Sept. 30 deadline. Despite bipartisan support, both Democrats and Republicans could not agree on a broader comprehensive relief bill that would provide additional aid to the ranks of unemployed Americans and range of hard-hit industries.

The House is expected to vote on a $2.2 trillion relief bill that includes airline funds on Thursday. However, barring an agreement with Treasury Secretary Steven Mnuchin, that bill is not expected to pass in the Senate.

On Sept. 30, both American and United told staff that they will reverse their furloughs and recall staff if Congress reaches a deal on aid.

Related: Airlines prepare for more than 32,000 furloughs on ‘terrible Thursday’

“I am extremely sorry we have reached this outcome,” American CEO Doug Parker told staff in a memo late on Sept. 30. “It is not what you all deserve.”

Air service to smaller communities across the U.S. also hangs in the balance. The CARES Act required airlines to continue serving all of their pre-pandemic destinations, with a few exceptions. Those rules also expired on Sept. 30.

American will suspend flights to 11 cities across the U.S., including Florence, South Carolina (FLO) and Kalamazoo, Michigan (AZO), on Oct. 7. Executives at Southwest Airlines and United have said the airlines could begin suspending destinations if air travel remains at historically low levels.

Related: American, United say flights to small cities are at risk unless Congress extends payroll program

While not officially exiting any markets, JetBlue Airways has suspended flights to six airports, ranging from Washington, D.C.-region powerhouse Baltimore/Washington (BWI) to Worcester, Massachusetts (ORH), until at least next April.

“Right now, we are not considering permanent closures,” Scott Laurence, JetBlue’s head of revenue and planning, told TPG in an exclusive interview on Wednesday.

However, Laurence acknowledged that some of the airport suspensions will extend to a year or more, including at Baltimore. Despite the long duration, JetBlue has “all intent in coming back,” he said.

Related: JetBlue service to Baltimore, some California airports now suspended until April

Alaska Airlines, Allegiant Air and Hawaiian Airlines have also said they will furlough staff beginning Thursday. GoJet Airlines will furlough 500 staff on Oct. 4 without a payroll support extension and Delta Air Lines has postponed at least 1,700 pilot furloughs until Nov. 1.

Major airlines Frontier Airlines, JetBlue and Southwest Airlines, as well as regional carriers Cape Air, CommutAir, Endeavor Air, Mesa Airlines, Piedmont Airlines and SkyWest Airlines, do not intend to furlough staff.

Former United affiliate ExpressJet Airlines shut down as previously planned on Sept. 30. The airline employed 2,395 staff at the end of July, according to the latest U.S. Bureau of Transportation Statistics data.

Barring Congressional action, more than 40,000 airline staff are due to be furloughed or laid off as a result of the crisis by November.

Related: US airlines ‘fighting for survival’ with no hope of V-shaped recovery

Updated with GoJet, Spirit Airlines furlough numbers.

Featured image by Michael A. McCoy/Getty Images.

 

 

 

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