American Airlines and United Airlines will be cutting 32,000 jobs combined after the US airlines failed to secure additional federal aid.
After failed attempts to get additional federal aid, American Airlines announced that it will cut 19,000 jobs while United Airlines will reduce its work force by 13,000 employees.
United Airlines chief executive officer (CEO) Scott Kirby said that the decision on the layoffs represented "a very sad day for all of us here at United."
Earlier, American Airlines CEO Doug Parker said he was still hoping for the job cuts to be averted if the firm saw signs that Congress and Treasury Secretary Steven Mnuchin would be able to reach an agreement.
In a memo to employees, Parker wrote: "Unfortunately, there is no guarantee that any of these efforts will come to fruition."
However, both Kirby and Parker mentioned that the airlines could undo the layoffs and quickly recall employees if a deal is reached in the coming days.
Kirby said: "We implore our elected leaders to reach a compromise, get a deal done now, and save jobs."
Previous furloughs and layoffs
The coronavirus pandemic has hit the airline industry hard, causing air traffic to fall dramatically. For the first half of 2020, American reported a loss of $5 billion while United lost $3.3 billion. Forecasts show that these losses will continue into 2021 or beyond.
In July, American Airlines announced that it will furlough about 25,000 front-line employees, who comprise 29% of its US mainline workforce.
The airline asked its employees to apply for new extended leaves that can last up to two years or early retirement packages. This way, they will get more people off payroll as possible before being forced to involuntarily strike out their jobs.
Prior to this, United Airlines said up to 36,000 employees or 40% of its workforce could be furloughed while Southwest Airlines told its employees that the carrier needs the number of passengers to increase thrice by the end of the year to elude layoffs or furloughs.
Meanwhile, Delta Air Lines announced that some 17,000 employees have volunteered to resign from the company and that it does not want involuntary furloughs comes the expiration of the federal aid terms.
Federal aid to US airlines
There is bipartisan support for issuing additional funds for one of the worst hit sectors during the pandemic. US. airlines previously said that the jobs of over 70,000 of their workers would be at risk when the current round of aid ends in the fall.
Over a dozen Republican senators said they supported the extension of financial assistance for American carriers to support payrolls while travel demand is still limited due to the virus, leading to growing financial losses.
The proposal for the new funds, which comes as Congress tackles how to design another national coronavirus relief package, has been receiving support from the majority of the House.
President Donald Trump even expressed his support for the release of another $25 billion in federal aid for the airline industry.
"I think it’s very important that we keep the airlines going," Trump said in a White House press briefing when asked about the extension of the aid.
"We don’t want to lose our airlines. If they’re looking at that, whether they’re Republican or Democrat, I’d be certainly in favor. We can’t lose our transportation system," he explained.
