U.S. airlines face a winter test of their finances and question marks over the reach of their domestic flight networks after failing, for now, to win fresh federal aid, Reuters reported. American Airlines and United Airlines began laying off 32,000 workers after a deadline passed with no new help from Washington, but told staff they would reverse this if lawmakers reach a deal on COVID-19 relief. The U.S. Senate adjourned yesterday until Monday evening, suggesting that no action on any airline assistance was near. U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke for 50 minutes yesterday but “distance on key areas remains,” a spokesman for Pelosi said. U.S. airlines are collectively burning about $5 billion of cash a month as passenger traffic has stalled at around 30 percent of 2019 levels. After tapping capital markets, they say they have enough liquidity to last them at least 12 months at that rate. They have argued for another $25 billion in federal payroll aid to maintain their workforce and meet demand as the economy rebounds. Without the money, flight networks could further shrink, hampering their revenue power and shortening their liquidity runway. Between voluntary and involuntary furloughs, major U.S. airlines’ workforce will shrink by at least 25 percent in October.
