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American, United Airlines to begin furloughs for tens of thousands of workers as federal payroll program expires on October 1

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Employees watch as American Airlines Flight 903 prepares for take off from Miami in 2016.

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  • American and United Airlines will begin furloughing tens of thousands of employees on Thursday as Congress fails to reach a deal on a COVID-19 relief bill.
  • American Airlines is set to furlough 19,000 employees, and United is expecting about 13,000, according to company announcements.
  • The federal Payroll Support Program (PSP) under the CARES Act passed by Congress in March expires on October 1.
  • "I am extremely sorry we have reached this outcome," American Airlines CEO Doug Parker wrote in the letter to employees. "It is not what you all deserve."
  • The House was set to vote on a $2.2-trillion stimulus package on Wednesday, but House Speaker Nancy Pelosi delayed the vote in a last-minute attempt to negotiate a deal with the White House, suggesting that both parties are coming closer to a bipartisan plan.
  • The company will "reverse our furlough processes and recall any impacted team members" in the event that Congress reaches a deal on the coronavirus stimulus package and extends the PSP, Parker wrote to employees.
  • Visit Business Insider's homepage for more stories.

American and United Airlines will begin furloughing tens of thousands of employees on Thursday as Congress fails to reach a deal on a COVID-19 relief bill, according to company announcements.

American Airlines is set to furlough 19,000 employees, and United is expecting about 13,000, citing the respective notes to employees obtained by Reuters reporter David Shepardson.

The furloughs come in light of the federal Payroll Support Program (PSP) under the CARES Act passed by Congress in March expiring on October 1.

The House was set to vote on a $2.2-trillion stimulus package on Wednesday, but the vote was delayed in a last-minute attempt to negotiate a deal with the White House.

"I am extremely sorry we have reached this outcome," American Airlines CEO Doug Parker wrote in the letter to employees. "It is not what you all deserve."

"It is a privilege to advocate on behalf of the hardworking aviation professionals at American and throughout the industry, and you have my assurance that we will continue to do so in the days ahead," the CEO continued, adding, "We are not done fighting."

In a note to employees, United announced that, "after months of aggressive cost-cutting and proactive debt-raising actions to manage the company through the COVID-19 crisis and its impact on our business, we regrettably are forced to move forward with the process of involuntarily furloughing 13,000 of our United team members."

Both companies mentioned that they will reverse the furlough process in the event that Congress reaches a deal on the coronavirus stimulus package and extends the PSP.

 

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin said they made progress towards an agreement on the relief bill, and the House Speaker canceled the Wednesday vote, suggesting that both parties are coming closer to a bipartisan plan.

"We made a lot of progress over the last few days," Mnuchin told reporters. "We still don't have an agreement, but we have more work to do and we're going to see where we end up."

Read the original article on Business Insider


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