U.S. airlines make urgent call for new bailout as job cuts loom
Passenger volumes remain down approximately 70%, according to Airlines for America
The chief executives of American Airlines, United Airlines and JetBlue Airways and the major aviation unions held a press conference Tuesday afternoon on Capitol Hill as part of a last-ditch effort for a six-month extension of the payroll support program granted through the $25 billion bailout from Congress back in March.
American Airlines CEO Doug Parker stressed that a massive wave of furloughs across the industry is coming in the next eight days without a new round of funding from the federal government.
"It'd be a very, very horrific event I think if that happens, given all the support," Parker added. "But if we can't get it done by October 1, I mean, absent absolute certainty, that will happen in the very near future."
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United CEO Scott Kirby noted that helping the airline industry will not only benefit the airlines' employees but the United States' overall economic recovery from the coronavirus pandemic.
"The reality is we need to do more to keep those professionals employed and to keep their support for the economy intact because it's not just about the tens of thousands of people whose jobs are at risk. That's important, but it's also about the indirect jobs that all of them support," Kirby said. "We are a critical cog for the economy. We're a multiplier effect and we will ultimately defeat this virus. And when there's a vaccine and when the economy is ready to back bounce back to full normal, we need these aviation professionals to be here to support that robust rebound for the entire economy."
In addition, Jet Blue CEO Robin Hayes argued that the American people have done their job to keep the industry afloat during the pandemic, and now its time for Congress to do theirs.
"We have 23,000 JetBlue crewmembers who have done their job," Hayes said. "We have all these amazing, essential workers, other airlines in the US that have done their job. I say it one more time, please Congress. We need you to do your job and we need you to do it now."
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The airlines still have access to loans from the government. In July, the Treasury Department signed letters of intent with 10 major airlines for the loans which are available until Sept. 30.
American Airlines and United so far have said both companies intend to take the loans. Those loans reportedly will carry restrictions on stock buybacks by the airlines and executive compensation.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AAL | AMERICAN AIRLINES GROUP INC. | 14.20 | -0.26 | -1.80% |
| LUV | SOUTHWEST AIRLINES CO. | 31.79 | +0.02 | +0.06% |
| UAL | UNITED AIRLINES HOLDINGS INC. | 94.40 | -0.23 | -0.24% |
| JBLU | JETBLUE AIRWAYS CORP. | 6.15 | +0.11 | +1.82% |
| ALK | ALASKA AIR GROUP INC. | 52.30 | -0.84 | -1.58% |
| DAL | DELTA AIR LINES INC. | 63.34 | -0.28 | -0.45% |
The call to action on Capitol Hill comes just a day after Sen. Roger Wicker (R-Miss.) and Sen. Susan Collins (R-Maine) proposed a bill to protect workers’ jobs until March 31 and ensure airline service continues to communities across the country.
“The CARES Act successfully saved thousands of jobs that support the airline industry and provided these businesses with some breathing space after the drastic drop in air travel caused by the COVID-19 pandemic,” Wicker said in a statement about Congress’ earlier bill, “However, the market has not turned around as much as we had hoped, and additional relief is needed.”
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Wicker is chairman of the Commerce Committee, which oversees aviation and Collins leads the transportation funding subcommittee.
Airlines for America, a trade representing major U.S. airlines, said passenger volumes remain down approximately 70%, a third of the U.S. fleet is idled and the industry continues to lose $5 billion in cash per month.