Airlines are days away from cutting thousands of employees as emergency federal aid lapses on Thursday. For workers of beleaguered carriers, which have racked up billions in financial losses after COVID-19 halted travel, any hope of keeping their jobs may now hinge on the fate of congressional wrangling over a new stimulus bill.
The updated Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act would provide airlines with an additional $25 billion in funding to help them maintain their payrolls. The broader $2.2 trillion measure, introduced Monday by House Democrats, would also offer mostand restore the $600 in extra weekly unemployment aid that expired in July.
Treasury Secretary Steven Mnuchin is urging airlines to delay job cuts as he meets with House Speaker Nancy Pelosi Wednesday afternoon to continue talks on the HEROES bill, according to Reuters. In the meantime, American Airlines, Delta and United have said they plan to cut or furlough more than 36,000 workers next month as demand for travel remains depressed amid the ongoing .
American Airlines CEO's stark warning
"The payroll support program unfortunately expires on October 1. Back in March, we thought demand would be back [and] we wouldn't need support beyond this time," American Airlines CEO Doug Parker told "Face the Nation" on Sunday.
Parker said he estimated that 100,000 airline workers will be out of work after October 1. American Airlines has said it willin October after the payroll support program expires. When pressed on whether the airline will continue with those cuts, Parker said he remains hopeful that Congress will come to agreement on the stimulus package.
"Our plan is to get Congress and the administration to come together and get the COVID relief package passed," Parker said. "We just need the bills to be laws."
Stocks of airlines and other travel industry stocks rose Wednesday as investors pinned their hopes on a stimulus deal. United Airlines shares rose 2.2% and American Airlines climbed 2.4%.
The updated HEROES bill would provide airlines with $25 billion in Payroll Support Program grants, the same amount that was provided in March under the CARES Act.
The International Air Transport Association on Tuesday downgraded its forecast for air travel. The trade group now expects air traffic for the full year of 2020 to fall 66%, compared with the previous year.
"A few months ago, we thought that a full-year fall in demand of -63% compared to 2019 was as bad as it could get," said Alexandre de Juniac, the CEO of the trade group, in a statement.