Back in March, airlines received $25 billion in relief so that workers could stay on the payroll as the coronavirus pandemic caused a massive disruption in world travel. But with that money now spent, major carriers had been hoping for another round of economic stimulus from the federal government as demand for travel remains low. Legislators have been unable to come to an agreement so far, however, leading American Airlines and United Airlines to announce that more than 32,000 employees would be laid off this week.

Both companies said that they would be able to bring back workers if a deal was made in the next few days. “We implore our elected leaders to reach a compromise, get a deal done now, and save jobs,” said United in a statement on Wednesday night. In a letter to American Airlines staff, CEO Doug Parker said that 19,000 jobs could be saved in the event of a new stimulus package, but he admitted that too much uncertainty clouds the issue at the moment. “I am extremely sorry we have reached this outcome. It is not what you deserve,” wrote Parker to his employees.

Demand for air travel remains 70 percent lower than it was at this point in 2019. Airlines usually earn much of their revenue during the busy holiday season, but it remains unclear how many people will be willing to travel home this year. With matters looking bleak for both air carriers and their workers, labor unions are picketing lawmakers’ offices and sending them waves of letters demanding relief now.

Questions:

1. Why are American and United Airlines laying off more than 32,000 workers this week?
2. Do you think airlines should receive immediate economic relief from the federal government? Why or why not?

Source: Alison Sider, “American Airlines, United to Cut 32,000 Jobs as Washington Debates Relief,” The Wall Street Journal, September 30, 2020.