U.S. Airline Industry Set to Shrink Dramatically at Midnight If Funding Doesn’t Materialize

United’s Munoz: This is ‘Orders of Magnitude Larger Than Anything We’ve Seen’

By Kurt Stolz on 30 September 2020
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After years of growth, the airline industry is set shrink in size, an unprecedented move that dwarfs the cutbacks that followed the September 11, 2001 attacks.

Thousands of jobs will be cut starting at the stroke of midnight on Thursday when the protections put into place by the Cares Act, which funded the loans and grants, runs out, yet workers are hoping that some form of funding materializes before the clock runs out.

“This industry has gone through hell and back on repeated occasion,” United Airlines’ executive chairman, Oscar Munoz, told CNN earlier this month.  “This is, by far, orders of magnitude larger than anything we’ve seen.”

The anticipated layoffs would be in addition to the almost 150,000 employees who have taken early retirement or early out packages offered by the airlines to reduce the overall number of jobs they would need to cut.

Secretary of the Treasury Steve Mnuchin, who has been directly involved with negotiations with the House of Representatives and Speaker Nancy Pelosi concerning legislation that would continue a form of payroll support, is reportedly in contact with airline CEOs in an attempt to avert the layoffs, several people familiar with the situation told Frequent Business Traveler.

American Airlines, the world’s largest carrier, is set to lay off at least 17,500 employees including flight attendants, gate agents, and pilots, while United Airlines will lay off approximately 16,400.    Delta has not yet indicated how many employees it may lay off in the future.

Once the layoffs occur, there will be a trickle down effect to other companies that provide services to airlines or work in allied industries.

Indeed, the U.S. airline industry itself employees 750,000 workers, but it indirectly supports ten million jobs and $1.7 trillion in economic activity, according to Airlines for America, an industry trade group representing major U.S. carriers.

(Photo: Accura Media Group)

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