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Airlines seek additional federal funds to keep staff on board as pandemic continues

Mitchell Hartman Sep 18, 2020
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Southwest Airlines Chairman and CEO Gary Kelly, center, speaks with other airline executives after a meeting at the White House regarding an extension of federal aid on Sept. 17. Win McNamee/Getty Images
COVID-19

Airlines seek additional federal funds to keep staff on board as pandemic continues

Mitchell Hartman Sep 18, 2020
Heard on:
Southwest Airlines Chairman and CEO Gary Kelly, center, speaks with other airline executives after a meeting at the White House regarding an extension of federal aid on Sept. 17. Win McNamee/Getty Images
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Executives with the biggest U.S. airlines — including Delta, United, American and Southwest — met with White House Chief of Staff Mark Meadows Thursday. 

The companies and their labor unions are pressing for another round of $25 billion in federal aid to help them get through another six months of the pandemic, which has caused air travel to plummet. They say it’s the way to avoid tens of thousands of layoffs across the industry.

As air travel plummeted in the spring, the airline industry got $25 billion in federal aid. And there was a big string attached: no involuntary furloughs or layoffs of airline employees.

The airlines did offer voluntary furloughs, buyouts and early retirements to cut labor costs. The workforce is down roughly 20%, according to figures from the Bureau of Labor Statistics.

“But that’s nowhere near the 70% reduction in passenger volumes. They’re not doing enough flying to actually support their current headcounts,” said Colin Scarola, equity analyst at CFRA Research. He estimates airlines could lay off as many as 50,000 employees starting in October.

The companies say another round of relief money could prevent layoffs.

But Madhu Unnikrishnan at Airline Weekly says the airlines don’t have enough revenue to keep all those employees around in the long run. Business travel is down more than 90%.

“And then also international travel is almost gone and probably not coming back anytime soon,” Unnikrishnan said.

In the meantime, the airlines are cutting routes and borrowing to stay financially aloft.

COVID-19 Economy FAQs

What’s the outlook for vaccine supply?

Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.

How has the pandemic changed scientific research?

Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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