American CEO Doug Parker tells workers to 'tear up' furlough notices after new relief bill
It's the news every airline worker has been waiting to hear.
The next round of furloughs is officially canceled at American Airlines, following the passage of the $1.9 trillion American Rescue Plan Act, the latest pandemic aid package. They're canceled at United, too. Combined, that staves off the furloughing of about 27,000 workers at those two airlines alone at least through September.
The bill, which is expected to be signed into law by President Biden in the coming days, includes an extension of the Payroll Support Program (PSP) that was first featured in the April, 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act.
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The $15 billion payroll support program is, in essence, meant to allow airlines to continue to pay employees even as revenue has plummeted amid the coronavirus pandemic. Airline labor groups have described it as financial aid to airline workers, which is simply distributed through the airline payroll systems.
"“For Flight Attendants and other aviation workers this bill passage means continuing the historic Workers First Payroll Support Program that we achieved in the CARES Act a year ago," Sara Nelson, president of the Association of Flight Attendants, said in a statement. "Aviation workers will receive a paycheck and healthcare through September, and stay current on our certifications so we’re in place to meet demand as vaccinations are readily available and travel returns to the skies."
The airline and broader travel industries have been hit especially hard by the pandemic. U.S. airlines lost a combined $35 billion in 2020, with passenger numbers down more than 60% from 2019 levels.
To receive aid, airlines must agree to not furlough workers before Sept. 30, 2021.
American Airlines had previously notified 13,000 workers of imminent furlough if PSP funding was not renewed.
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"For our 13,000 colleagues who received Worker Adjustment and Retraining Notification (WARN) notices last month, those are happily canceled – you can tear them up," CEO Doug Parker said in a letter to employees.
United had planned to furlough about 14,000 workers without an extension.
"We have been strategically setting United Airlines up to emerge from this as the best global airline in the world," United CEO Scott Kirby said in his own message to employees. "But a large part of that preparation relies on one of our greatest assets: our frontline employees. By extending PSP, our teams will be able to remain current in their training and ready to match expected future demand."
Although international travel demand is not expected to meaningfully recover before 2022, airlines have expressed increasing optimism over domestic travel demand, particularly as COVID-19 vaccine rollout continues.
On Wednesday, President Biden said that all Americans will have access to the vaccine by the end of May.