Pelosi Wants to Stall Furloughs of 40,000 Airlines Workers, Assures Additional Aid

By M.G. Alison. Oct 03 2020, 00:32 AM EDT

Pelosi Asks Airlines to Stall Furloughs of 40,000 Workers, Assures Additional Aid — House Speaker Nancy Pelosi had asked airlines to hold off furloughing about 40,000 workers and assured them that an additional federal aid will be going their way. Photo by Chip Somodevilla/Getty Images

House Speaker Nancy Pelosi has asked airlines to hold off furloughing of some 40,000 airline workers and assured them that additional federal aid would be going their way.

Pelosi's plea came after thousands of airline workers have received notices of getting furloughed on October 1, after the terms of a $25 billion grant ended on September 30.

Airlines have been experiencing a plunge in bookings due to the COVID-19 pandemic, which have resulted to billion of losses.

The grant was part of the Payroll Support Program (PSP) of the CARES Act approved last March wherein airlines received federal payroll aid by agreeing not to lay off their employees through to September 30.

American Airlines received the biggest grant at $5.8 billion, while Delta Airlines got $5.4 billion, about $5 billion went to United and Southwest got nearly $3.3 billion in payroll support.

In recent weeks, airlines and unions have been urging Congress to extend their $25 billion grant so they will not have to furlough workers or cut down their workforce until March of 2021.

These airline workers include pilots, flight attendants, baggage handlers and gate agents, among others. They have been able to stay on their jobs by getting partial pay through the $25 million grant.

The Heroes Act 2.0 that Pelosi and the House Democrats passed on Thursday amidst her continuing talks with Treasury Secretary Steven Mnuchin included provisions for the airline industry.

It has provisions of $25 billion to stave off thousands of layoffs at passenger airlines and another $3 billion for airline contractors.

Scott Kirby, the CEO of United Airlines which has started to furlough 13,000 workers this week, said that an extension of the grant would also allow them more time to recover without losing any of their employees at least until next year.

Following Pelosi's promise of additional payroll support to save jobs of thousands of airline workers, shares of major U.S. carriers rose.

American Airlines which has started to furlough 19,000 workers saw its shares go up more than 3 percent after Pelosi's announcement while United Airlines saw its shares up by 2 percent.

Not all airline workers though are in danger as Delta and Southwest have no plans of furloughing their employees as of yet as they are compensating via cost-cutting and voluntary agreements with workers.

Although passenger air travel has rebounded in late June and early July, there has been no increase in the figures, according to Airlines for America trade group.

Passenger volumes are down by 70 percent as of September 20 as compared to last year. Also in the same period, member airlines are operating less than half of the flights they did.

With the airline revenues having taken a sharp dive, U.S. airlines are burning through about $5 billion of cash every month.

There is hope though for airline workers as airline CEOs have said that they are willing to reverse course should there be an additional federal grant.