More than 80,000 airline workers face furloughs as COVID-19 devastates industry
(CBS News) - More than 80,000 pilots, flight attendants and other airline workers face unpaid time off and an uncertain future as carriers attempt to navigate catastrophic losses stemming from COVID-19.
Beyond vacationers leery of traveling during a pandemic, major U.S. carriers have lost lucrative business travelers as the coronavirus continues its deadly spread, with a day of reckoning coming for tens of thousands of aviation industry workers in the fall.
As Delta Air Lines’ CEO Ed Bastian declared after the Atlanta-based carrier reported a record adjusted quarterly loss of $2.8 billion last month: “I don’t think we’ll ever get back entirely to where we were in 2019 on the volume of business traffic.”
About 17,000 employees, or 20% of Delta's workforce, left the company last week, either through buyout packages or by taking early retirement, according to the company.
The cutbacks are "a difficult but necessary step towards Delta's transformation into a smaller, more nimble airline that will be better positioned to endure the crisis and recover quickly," Bastian wrote in a memo to employees. "We will be guided in the second half of the year by our goal to eliminate our daily cash burn while improving customer satisfaction and building loyalty that will serve us when demand recovers."
Other carriers, also burning through millions in cash daily, have been notifying employees that furloughs are likely, with October 1 looming as an especially dark day for the industry. That’s in large part because airlines that keep workers on their payroll through September 30 would not have to repay funds they received under the CARES Act, which include nearly $50 billion in support to U.S. airlines.
About 25,000 front-line workers at American Airlines could be furloughed October 1. However, the Fort Worth, Texas-based carrier recently reached a deal with its 14,000-member pilots union to offer more leaves and early retirement packages to limit the coming carnage. It’s also extending until August 12 a deadline for other workers to decide whether to take voluntary leave with reduced pay or early retirement.
United Airlines last month warned that almost half of its front-line workforce could be furloughed this fall. The airline's tally of 36,000 workers includes 15,000 flight attendants, 11,000 customer service reps and gate agents, 5,550 maintenance employees and 2,250 pilots.
Such notifications are required under the federal Worker Adjustment and Retraining Notification Act, or WARN Act, and are not unexpected, especially in the current economic climate.
Alaska Airlines told CBS News it's sending notices of potential furloughs to 4,200 front-line employees, but expects the final count to be lower. About a third of Alaska Airlines' 3,100 pilots have opted to take voluntarily leave or early retirement, letting the carrier avoid pilot furloughs for now. Overall, Alaska Airlines plans to shrink its workforce by 35%, but market conditions could change the equation.
“We’re making tough decisions to right-size Alaska Airlines for future success, but it means we’re losing fantastic people. We must furlough some people, and those decisions are very difficult,” an Alaska Airlines spokesperson said.
"We're in the midst of the biggest demand contraction in the history of our industry," Alaska Airlines President Ben Minicucci said on the airline's second quarter earnings call.
Other carrier considering cutbacks include:
- Frontier Airlines, which has notified 35% of its flight attendants and pilots that they may be furloughed as soon as October, with 925 flight attendants and 559 pilots sent notifications at the end of July.
- Allegiant Airlines, which plans to cut 220 non-union positions after September 30 and expects to warn 275 pilots, or nearly 30%, that they could be facing unpaid time off.
- ExpressJet, which is seen as likely to wind down its operations after losing its flying contract with United as of next year. The carrier employs 3,000 people.
- Hawaiian Airlines, which is warning 2,135 of its employees that they could be furloughed, including 226 of its roughly 850 pilots.
- PSA Airlines, a subsidiary of American Airlines. PSA may layoff 730 pilots and 500 flight attendants.
- Piedmont Airlines, which has notified 120 pilots they face furloughs.
- Republic Airlines, where about 1,800 pilots and flight attendants face furloughs.
- GoJet, where a spokesman for the regional carrier confirmed to CBS News that warnings were sent to all of its 1,185 employees. “The exact percentage of employees who will ultimately be impacted is based on schedule demand and is unknown at this time. However, we expect our schedule to continue to be significantly reduced,” the GoJet spokesperson said.
While unions are lobbying for an extension of the Payroll Support Program adopted in the CARES Act passed in late March, it's unclear whether Congress will include airlines in the financial support package now being considered.
"Flight attendants and other aviation workers burned up congressional phone lines over the past week to gain support for a clean extension of the Payroll Support Program," Sara Nelson, president of the Association of Flight Attendants, said in an emailed statement.
“This provision is the most successful jobs program of COVID relief and maintains service to all of our communities,” added Nelson, whose union represents nearly 50,000 flight attendants at 19 airlines.