More than 35,000 employees across the airline industry are set to be out of a job by Thursday due to the effects of the COVID-19 pandemic on travel, the Washington Post reported. It’s another devastating blow for an industry facing a crisis analysts say is already far worse than it experienced after the terrorist attacks of Sept. 11, 2001, and one that has already seen employment in air transportation decline by 100,000 jobs according to one measure. The employees facing furlough will be victims of the ongoing devastation the pandemic has inflicted on airlines, which have seen demand for travel drop precipitously since March, but also of a Congress that says it wants to protect their jobs with billions of dollars in aid and yet has been unable to reach agreement on a bill to do so. Lawmakers say they didn’t intend to create a precipice when they gave airlines an initial $25 billion in aid on the condition that they not lay off workers until October. Like many Americans, they expected the virus to be under control by now. Instead, it continues to spread and air travel is stuck at about 700,000 passengers a day, a third of its normal rate. Read more.
In related news, American Airlines said on Friday that it has secured a $5.5 billion government loan and could tap up to $2 billion more in October depending on how the U.S. Treasury allocates extra funds under a $25 billion loan package for airlines, Reuters reported. Airlines have until Sept. 30 to decide whether to take the U.S. Treasury loans, which were authorized under the CARES Act coronavirus relief bill passed by Congress in March. American Airlines was originally allocated $4.75 billion, but carriers including Delta Air Lines and Southwest Airlines have already said they do not intend to take their share of the package, opening the door for the funds to be used by other airlines. Fort Worth, Texas-based American said it has already drawn down $550 million of the Treasury loan, which is backed by its loyalty program. The loans also require airlines to issue warrants and carry restrictions on executive compensation and buybacks. Among other carriers, United Airlines said last week it will tap the Treasury loans, but it was not clear whether the airline would only seek its $4.5 billion share or more. Read more.
