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United Airlines said yesterday that it is preparing to furlough 16,370 workers when federal aid expires on Oct. 1 as the coronavirus pandemic continues to devastate the airline industry, though one union said many more people will be without pay, Reuters reported. United’s cuts include 6,920 flight attendants, but the union representing them said 14,000 will not have a paycheck in October unless Congress acts to extend $25 billion in aid. This is because many have opted for leaves that will provide healthcare but no money, Association of Flight Attendants-CWA International President Sara Nelson said. Airlines have been lobbying Washington for a second stimulus package to protect jobs through March while the industry awaits a recovery. The first $25 billion, which covered airline payrolls, expires this month, but talks have stalled as Congress has struggled to reach agreement on a broader coronavirus assistance package. Chicago-based United had over 90,000 employees before the pandemic brought the industry to a near standstill in March. It warned in July that 36,000 jobs were at risk of involuntary furloughs as demand remained weak.

Delta Air Lines helped its former Brazilian partner Gol Linhas Aereas Inteligentes to refinance a $300 million loan that was due on Monday and which the U.S. carrier had guaranteed, according to an internal memo, Reuters reported. Delta confirmed the memo was sent to employees on Wednesday but declined to provide additional details. Gol said on Tuesday that it had paid the $300 million debt, according to a securities filing, without providing details. The 2015 loan had included a guarantee from Delta which helped Gol get a better interest rate. “As part of the refinancing, Delta worked with Gol to replace the existing loan guarantee with a smaller loan secured with incremental collateral,” Delta said in the memo. It said the deal reduces its own financial exposure and provides additional security, while providing Gol more time to address its obligations during the coronavirus pandemic, which has decimated air travel across the globe.

President Donald Trump said yesterday that his administration would help U.S. airlines facing sharp downturns in passenger traffic as a result of the novel coronavirus pandemic, but gave no details, Reuters reported. “We’ll be helping the airlines. You have to help the airlines,” Trump told reporters before departing on a visit to Kenosha, Wisconsin. “Airlines are a tough business in good times.” White House Chief of Staff Mark Meadows last week said Trump was weighing executive action to avoid massive layoffs at airlines if Congress fails to agree on a fresh economic stimulus package to counter the fallout from the pandemic. Helping the airline industry is a “significant concern” for the Trump administration given its strategic importance for national security and supply chains, in addition to the large number of jobs at stake, a senior administration official said. The official said there was significant bipartisan support in Congress for measures to help airlines and ensure they survived the prolonged collapse in demand. U.S. passenger airlines are still collectively losing more than $5 billion a month as 30 percent of planes remain parked. Passenger travel demand is down about 70 percent and, on average, planes that are flying are half-full.

Colombia’s disaster fund will lend as much as $370 million to Avianca Holdings SA to help with its restructuring after a halt in travel during the Covid-19 pandemic forced the company into bankruptcy, the country’s finance ministry said in a statement, Bloomberg News reported. The emergency mitigation fund’s committee approved the government-backed loan, due November 2021, under the framework of debtor-in-possession financing the company is seeking in its U.S. bankruptcy court case, the ministry said in a statement on Friday. Avianca, one of the biggest airlines in Latin America, filed for chapter 11 protection in New York in May after travel bans forced the airline to ground its fleet. It reached an agreement with lenders this month for a substantial part of the $2 billion it’s trying to raise as it restructures. The company is offering one of the highest premiums yet seen on a $1.3 billion debtor-in-possession loan.

United Airlines is preparing for the biggest pilot furloughs of its history after announcing on Thursday the need to cut 2,850 pilot jobs this year, or about 21 percent of the total, without further U.S. government aid, Reuters reported. Airlines, reeling from the devastating impact of the novel coronavirus pandemic on air travel, have asked the U.S. government for another $25 billion to cover employee payroll through March. The first tranche, which banned any job cuts until Oct. 1, expires at the end of September, but talks in Washington have stalled as Congress has struggled to reach agreement on a broader coronavirus assistance package. United’s planned cuts, released in a memo to employees and shared with the media, would run between Oct. 1 and Nov. 30. They are significantly higher than the 1,900 announced earlier this week by Delta Air Lines and 1,600 by American Airlines. Facing a shrinking industry in the years ahead, airlines have generally tried to mitigate the number of forced job cuts by offering early retirement or voluntary departure deals, but some carriers’ packages have been more attractive than others. “While other airlines have chosen to reduce manpower through voluntary means, it is tragic that United has limited those options for our pilots and instead has chosen to furlough more pilots than ever before in our history,” the union representing United’s 13,000 pilots said in a statement. United said the numbers were based on current travel demand for the remainder of the year and its anticipated flying schedule, which it said “continues to be fluid with the resurgence of COVID-19 in regions across the U.S.”

President Donald Trump is weighing executive action to avoid massive layoffs at U.S. airlines if Congress fails to agree a fresh coronavirus stimulus package, White House Chief of Staff Mark Meadows said yesterday, Reuters reported. His remarks came a day after American Airlines said its workforce will shrink by 40,000, including 19,000 involuntary cuts, in October without an extension of government aid as the pandemic continues to devastate travel demand. U.S. airlines received $25 billion in payroll aid under the CARES Act to protect jobs through October and the industry has lobbied for another $25 billion to keep workers employed through March, when they hope travel demand will be stronger. Meadows said he had spoken with officials from American, as well as from United Airlines and Delta Air Lines. “We will continue to work with the administration and our bipartisan supporters in Congress and hope to come to a resolution in a timely fashion,” American said in a statement. United has warned that 36,000 jobs are at risk. Delta said Monday that it would furlough 1,941 pilots but has not detailed cuts across other employee groups.

Delta Air Lines is facing a fresh Latin American headache as a Monday deadline nears for former Brazilian partner Gol Linhas Aereas Inteligentes to repay a $300 million loan that the U.S. carrier guaranteed, Reuters reported. If Gol fails to repay — which ratings agencies say is looking more likely — Delta would have to honor the debt on Gol's behalf, honoring the five-year-old agreement. But just like Gol, the Atlanta-based carrier, which said in July it was burning $27 million a day here has little cash to spare due to the coronavirus pandemic. Gol’s struggles are just the latest challenge for Delta, whose investments in Latin America, once seen as a growth area, have faltered due to COVID-19. Delta's 49 percent stake in Aeromexico and 20 percent stake in LATAM Airlines Group are at risk of dilution or being wiped here out as both airlines undergo bankruptcy restructurings. For Gol, Brazil’s largest carrier, the due date of the Delta-backed private loan comes amid a severe cash crunch. The loan was extended by unidentified private investors. By Monday, before repaying the loan, Gol could have just 1.6 billion reais ($285.19 million) left in cash, Reuters calculated. The calculation is based on Gol’s cash and cash equivalents, as well as its liquid investments, as of June 30, minus its expected cash burn of 3 million reais a day. 

American Airlines warned employees yesterday that it would cut up to 19,000 workers on Oct. 1, saying that there was little sign that the pandemic-induced reluctance to travel was diminishing, the New York Times reported. The airline is looking to cut thousands of flight attendants, pilots, technicians, gate agents and other staff, it said. Including buyouts, retirements and leaves of absence, the company expects to have about 40,000 fewer employees on Oct. 1 than it did before the pandemic, a 30 percent decline in its work force. American is just the latest airline to predict bad news. Earlier this summer, United Airlines said that it could furlough as many as 36,000 employees in the fall. And, on Monday, Delta Air Lines warned that it might have to furlough as many as 1,941 pilots in October, even after nearly as many had accepted buyouts. While weak demand is spurring these announcements, the airlines are also seeking to put pressure on Congress and the Trump administration to strike a deal on another coronavirus stimulus package. Passenger airlines received $25 billion to help pay workers under a March legislative package, with American alone receiving $5.8 billion. Entire sectors, such as live entertainment, hospitality and travel, remain either shut down or severely restricted. And experts warn that the longer the crisis persists, the more lasting the damage will be: Furloughs will turn into permanent job losses, short-term business closures will lead to bankruptcies, and sectors that were relatively insulated from the pandemic will suffer as the public health crisis morphs into a more traditional recession. “This is not a stopgap crisis,” said John Lettieri, president of the Economic Innovation Group, a Washington research organization. “It is a prolonged, deep, far-reaching crisis that is going to challenge the ability of businesses to survive.” Things could get worse in the coming months. Restaurants and other businesses that have been able to shift some operations outdoors will struggle when the weather turns colder. And health experts warn that infections are likely to rise again in the fall and winter. That means businesses have to prepare for the crisis to last well into 2021 — which in many cases will mean further layoffs and cost-cutting.

Virgin Atlantic Airways Ltd. is set to find out whether it has enough support from creditors for a 1.2 billion-pound ($1.6 billion) rescue or if it will need a judge to overrule them in order to stave off collapse, Bloomberg News reported. The U.K. carrier founded and controlled by billionaire Richard Branson has already secured the backing of three creditor classes and is now seeking approval from the fourth, comprising trade suppliers, in a vote yesterday. Support from the suppliers would eliminate the last potential obstacle to Virgin’s proposal ahead of a legal hearing next week. Should the creditors vote against the plan, the airline will have to persuade a judge, who under a new U.K. procedure can rule that a restructuring is preferable to insolvency even without the support of all relevant parties. The 36-year-old airline, which operates a fleet of 40 wide-body planes, reiterated that it remains “confident in the plan” and that it will be signed off. Virgin saw demand cut to a quarter of 2019 levels in the first half of the year as the coronavirus pandemic brought travel to a near standstill. It employs 6,500 people after slashing more than 30 percent of its staff, part of an airline worker toll of about 75,000 across Europe.

Delta Air Lines is set to furlough 1,941 pilots in October, the carrier said in a memo to employees yesterday that noted the fallout from the COVID-19 pandemic and plunging air travel demand, Reuters reported. U.S. airlines have warned they will need to furlough tens of thousands of workers once $25 billion in U.S. government stimulus funds run out in September. The aid, which covered employees’ pay, was meant to help them weather the pandemic and preserve jobs until a recovery, but travel remains depressed. “We are six months into this pandemic and only 25 percent of our revenues have been recovered. Unfortunately, we see few catalysts over the next six months to meaningful change this trajectory,” Delta’s head of flight operations John Laughter said in the memo. He said the airline is “simply overstaffed.” Atlanta-based Delta had originally estimated a surplus of 2,558 pilots but reduced the number of involuntary furloughs following early retirement and voluntary departure programs, a spokeswoman said.