19,000 American Airlines workers to be furloughed Thursday as CARES Act funds run out
Thursday is an important turning point for tens of thousands of airline workers. Financial aid for the airline industry runs out at midnight Wednesday.
Without an extension, Fort Worth-based American Airlines says it will begin to furlough 19,000 workers on Thursday.
The airline, one of the North Texas region's biggest employers, had 140,000 workers before the pandemic.
Its rival, Dallas-based Southwest Airlines, is also going through financial hardship.
Southwest Airlines has said it does not plan to lay off any employees through the end of the year.
But the union worries about what happens after that, if CARES Act funding isn't extended.
American Airline CEO Doug Parker said Wednesday that he's willing to delay thousands of involuntary furloughs if Congress is in good faith negotiations.
“This is far reaching, much more far reaching than American Airlines,” APFA spokesman and flight attendant Paul Hartshorn Jr. said.
Airlines workers, like Hartshorn, are living in limbo.
CARES Act money provided to the airline industry back in the spring, to keep workers on the payroll, expires at midnight.
Without action from Congress, some 40,000 airline workers will be involuntarily furloughed on Thursday, with 19,000 at American Airlines.
United Airlines announced late Thursday that it would also have to furlough some 13,000 workers.
“They don't know, they don't know what's happening. They're trying to make other plans. They're trying to keep this job. They don't know which way to go,” Hartshorn added.
In a statement, the union representing Southwest Airlines flight attendants said, in part: "It is imperative to keep our frontline employees in the air and off unemployment lines, so securing additional support is crucial."
Industry analysts said the four largest U.S. airlines, including American and Southwest, lost a combined $10 billion in the second quarter of this year.
Airline travel remains down some 70% due to the pandemic.
But SMU economist Mike Davis questions why the industry should receive preferential treatment.
“Lots and lots of people are suffering from this virus and it's not exactly clear why we should look at the airline industry and bail them out,” he said.
Seven airlines, including American, but not Southwest, took the U.S. Treasury up on billions of dollars in loans to provide immediate cash flow.
Separately, Congress has been considering a second round of airline aid for weeks, but it's hung up in the debate over a larger national relief package, with a price tag of anywhere from $500 billion to $2.2 trillion.
“Economist like myself need to be honest about this, that is frightening having all of this debt hanging around out there,” Davis explained.
But for airline workers, it's understandably more personal.
“We haven't stopped. We've kept up all of the pressure, along with all of the other aviation unions at Americans and other unions throughout the country. We're going to get this done,” Hartshorn said.
Delta Airlines is also looking at furloughs for about 2,000 pilots.