American Air drops furloughs as aid is extended six months
American Airlines will cancel furlough notices sent to 13,000 employees after Congress passed a $1.9 trillion aid package, the third pandemic-relief legislation since the beginning of COVID-19 a year ago.
Airlines are in line for $14 billion in grants and loans in exchange for promises not to furlough or lay off employees until the end of September.
That means that the government will once again be subsidizing jobs for Fort Worth-based American Airlines, which has already taken more than $9 billion in stimulus aid and is likely in line for another $3.1 billion with this package.
“The bill is now on its way to President Biden for his signature so that it can be signed into law,” said a letter to employees from American Airlines CEO Doug Parker and President Robert Isom on Wednesday. “Once that happens, it will extend the commitment that all U.s.-based American Airlines team members will continue to receive pay and benefits through Sept. 30, 2021.
”For our 13,000 colleagues who received Worker Adjustment and Retraining Notification (WARN) notices last month, those are happily canceled — you can tear them up!,” the letter said.
Southwest Airlines has received about $5 billion in government aid so far and would be in line for roughly $1.7 billion more under the new bill. The bill keeps some of the same restraints on airlines as previous stimulus deals did, namely restrictions on executive pay and dividends and prohibitions against pay cuts.
Dallas-based Southwest said in early January that it would not furlough any employees or cut pay in 2021.
The December stimulus bill came nearly three months after airlines began laying off employees Oct. 1. Those employees were recalled and received paychecks just before Christmas, including 17,500 at American Airlines. However, many of them still have not started working yet as airlines struggle to bring back thousands of workers with air travel demand still depressed.
The December stimulus package gave airlines four months of support and airlines issued fresh furlough notices in early February, targeting April 1 for nearly 30,000 workers. This new package gives six months of support as airlines are hoping travel demand will accelerate as vaccine distribution grows.
“For flight attendants and other aviation workers this bill passage means continuing the historic workers-first Payroll Support Program that we achieved in the CARES Act a year ago,” said a statement from Sara Nelson, president of the Association of Flight Attendants, the country’s largest flight attendants union which includes some workers at American Airlines subsidiaries. “Aviation workers will receive a paycheck and health care through September, and stay current on our certifications so we’re in place to meet demand as vaccinations are readily available and travel returns to the skies.”