Airlines are warning they’ll have to start cutting tens of thousands of jobs in the month before the elections unless they receive more financial relief from Washington.
The dire predictions put industry supporters like President Trump in a tough situation. Severe job losses would deal another blow to the economy so close to Election Day, particularly in battleground states, but air carriers already received significant government aid earlier in the pandemic to help weather the coronavirus downturn and avoid layoffs in the near-term.
The airline industry is asking for a $25 billion injection to postpone any job cuts at least until April. That request comes after the CARES Act, signed into law in late March, provided $25 billion in direct grants to passenger airlines, as well as $25 billion in loans and loan guarantees.
Under the terms of that relief funding, airlines are prohibited from firing or laying off any employees until Oct. 1.
That’s when the job cuts are slated to start.
American Airlines expects to ax 19,000 jobs, and United Airlines said it plans to cut 16,370. Delta Air Lines expects to lay off pilots but will not furlough any flight attendants due to the number of employees who opted for early retirement during the pandemic.
With airline bookings down 73 percent and booked revenue down even more at 86 percent, Nick Calio, head of the industry group Airlines for America, said the impending job cuts are because “we’re realistic about it.”
“There’s no way for us around it. We can’t just wait to see if the government acts. While we’re hopeful that Congress might act … there are probably some executive actions that could be taken. If there are and Congress is not going to act, we would encourage them,” he said.
President Trump last month expressed support for providing $25 billion in federal aid to the airlines, while White House chief of staff Mark Meadows said Trump is considering executive action to avoid airline industry layoffs if Congress doesn’t act.
“You’ve heard the president two or three times say that he wants aid for the airlines. You’ve heard Mark Meadows say that he wants aid for the airlines. Our problem is that nothing is happening on a larger bill and, currently, we don’t see much encouraging about a larger bill happening,” Calio said.
Individual airlines and union representatives are now pleading with Trump administration officials and congressional Democrats to extend the payroll support program from the CARES Act for another six months.
The CEO of American Airlines and the heads of major unions sent a letter Wednesday to coronavirus relief bill negotiators asking for protections over the next six months.
“We expected and hoped that the virus would have abated, and demand for air travel would have rebounded, by [Oct. 1],” they wrote. “Unfortunately, that has not been the case, and demand is still historically low.”
Widespread layoffs could have electoral implications.
Several major airline hubs are located in battleground states, putting pressure on Trump and some senators seeking reelection to save those jobs just a month out from Election Day. Any layoffs would give challengers an opening to argue the incumbents didn’t protect industry jobs and local economies.
American Airlines has a hub in Charlotte, N.C., where Sen. Thom Tillis (R) is fighting to fend off a Democratic challenger in a race labeled a “toss-up” by The Cook Political Report.
Another major American hub is in Phoenix, where Sen. Martha McSally (R-Ariz.) faces a formidable challenge in a race that “leans Democratic,” according to the nonpartisan Cook Political Report.
Another vulnerable Republican, Sen. Cory Gardner of Colorado, has constituents who work at a United hub in Denver. His race is also labeled a “toss-up” by Cook.
In Michigan, a state Trump narrowly won in 2016, a Delta hub could be hit if the company moves forward with pilot layoffs.
American Airlines is headquartered in Texas, where Democratic presidential nominee Joe Biden recently added campaign staff and Sen. John Cornyn (R-Texas) is seeking reelection for a seat labeled “likely Republican.”
Job cuts at airlines threaten to hit employees at other businesses as well.
Eduardo Angeles, managing director and senior counsel at the law firm Clark Hill, said “there is a trickle-down effect economically for everything that is being suffered by the airlines.”
“For every water that’s sold in the terminal, that’s someone’s job. For every bag that’s not put on the airplane, that’s someone’s job,” said Angeles, a former in-house counsel for airports in San Francisco and Los Angeles who later served as associate administrator for the Federal Aviation Administration under former President Obama.
Trump, in August, said he would support ideas from both sides of the aisle when it comes to helping the airlines.
“I think it’s very important that we keep the airlines going,” he said. “We don’t want to lose our airlines. If they’re looking at that, whether they’re Republican or Democrat, I’d be certainly in favor. We can’t lose our transportation system.”
But some industry groups say the Trump administration should be doing more, particularly as coronavirus testing proves to be a significant obstacle.
Major travel industry groups recently called on the Trump administration to establish a globally accepted framework for testing protocols, noting that other countries have implemented pre-travel or post-arrival testing requirements.
In the meantime, industry leaders are pressing for any kind of broad relief to stave off job cuts until airlines can start recovering.
“The number of jobs down-economy driven by a single airline job is significant. We believe that we are uniquely positioned to help empower a recovery if we can survive,” Calio said.