American, United move ahead with more than 32,000 furloughs, but will recall workers if cornoavirus aid deal reached

American Airlines and United Airlines will start furloughing more than 32,000 employees on Thursday after talks for a national coronavirus aid package failed in Washington, but both carriers say they are prepared to reverse course if a stimulus deal is reached.

The terms of $25 billion in federal payroll support Congress passed for the ailing sector in March prohibit airlines from cutting jobs until Oct. 1. The aid was meant to help airlines cope with a sharp drop in bookings until there was a significant recovery in demand, which hasn't materialized.

Airlines spent the last several months urging lawmakers for another $25 billion in payroll support, a proposal that has won bipartisan support. That would have preserved jobs through the end of March, despite weak travel demand.

However, talks for a broad coronavirus package that would include another round of airline aid faltered on Wednesday, opening the door to more than 30,000 job cuts, starting Thursday, the lion's share of them at American and United.

American's CEO Doug Parker told employees that the airline "will begin the difficult process of furloughing 19,000 of our hardworking and dedicated colleagues." That amounts to close to 14% of the Fort Worth, Texas-based airline's pre-pandemic staff.

Executives have said they don't expect demand to bounce back to 2019 levels without a coronavirus vaccine and have said the pandemic's resulting crisis for the industry is worse than after the Sept. 11 attacks.

Losses topped $10 billion in the second quarter alone and a public hesitant about travel promises more difficult months ahead. Airlines have slashed service to match weak demand as the pandemic and a web of travel restrictions hurt bookings, particularly for once-lucrative international routes.

While House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin failed to reach a deal earlier Wednesday but talks are set to continue.

Parker told employee... (Read more)

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