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Airline Industry On Verge Of Crash As COVID19 Money Runs Dry
Airline Industry On Verge Of Crash As COVID19 Money Runs Dry
Via CNBC.com:
Just as the U.S. labor market shows signs of recovery, tens of thousands of airline workers are preparing themselves for economic pain from the coronavirus pandemic to come in the months ahead.
U.S. airlines have warned more than 75,000 employees that their jobs are at risk on Oct. 1 when the terms expire on a $25 billion federal aid package that protects passenger carrier workers’ paychecks, about a month before Election Day on Nov. 3. Despite the recent job gains in the U.S., the Department of Labor earlier this month said 16.3 million Americans are out of work.
A push by airline labor unions and later, company executives, to include another $25 billion for airline payrolls to keep jobs through the end of March has won bipartisan support from lawmakers and from President Donald Trump. But Congress and the White House have failed to reach an agreementon a new national aid package that could include the additional airline support.
The trouble in the airline industry and lack of a new aid package have left employees in limbo. U.S. passenger and cargo carriers together employ around 700,000 people, but other jobs could be at stake. The industry supports some 10 million jobs, according to Airlines for America, a trade group that represents large U.S. carriers. Those include more than 6 million jobs in tourism and hospitality.
“We do recognize that there is fairly significant spillover” into the economy from the pandemic, said David Lebovitz, global market strategist at J.P. Morgan Asset Management. “You’re not paying for gas in your car and then you’re not going out and buying a sandwich at lunchtime.”
Without a new stimulus bill in Congress, airline workers could face lower unemployment benefits than in previous months and a bleak job market if they are let go after the airline aid terms expire after Sept. 30. Trump earlier this month ordered a $400 unemployment benefit boost, $300 from the federal government. Congress has left for recess but could return before September if an aid package is reached.
“Anyone who is losing their job now is looking at a job market that is really unfavorable to them,” said Sara Nelson, president of the Association of Flight Attendants-CWA, the labor union that represents cabin crews at more than a dozen airlines and has urged Congress to provide additional aid to the sector.
“This is a horrible position to put people in,” Nelson said of the lack of a new national aid package. “We’re keeping the whole country in this position of uncertainty.”
The Big 4 in the airline industry continue to hemorrhage money.
The four biggest U.S. airlines lost more than $10 billion, combined, in the last quarter. Travel demand has ticked higher, but screenings by the Transportation Security Administration at U.S. airports is about 30% of last year’s levels this summer, usually airlines’ most lucrative season. Executives have repeatedly said that they expect to emerge from the crisis as smaller carriers, meaning fewer jobs.
The International Air Transport Association, which represents most of the world’s airlines, forecast last month that global air travel demand won’t recover to 2019 levels until 2024, a year later than previously expected.
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