The Business Times

US airlines prepare employee recalls as relief nears; United calls them 'temporary'

Published Mon, Dec 21, 2020 · 11:11 PM

[CHICAGO] American Airlines and United Airlines said on Monday they were preparing to recall tens of thousands of furloughed employees as they awaited lawmakers' approval of a fresh US$15 billion in payroll support under a broader Covid-19 relief package.

But in a staff memo, United executives warned that it expects the recall will be "temporary" as travel demand remains depressed. The relief would cover employee payroll costs until March 31, 2021.

"The truth is, we just don't see anything in the data that shows a huge difference in bookings over the next few months," CEO Scott Kirby and President Brett Hart said in the memo, released by United.

Wrestling with a sharp downturn in travel demand amid the pandemic, American and United together furloughed more than 32,000 workers in October, when an initial US$25 billion to cover six months of airline workers' salaries expired.

The House of Representatives and Senate were aiming to pass a bipartisan US$900 billion coronavirus aid package before the end of the day.

The US$15 billion earmarked for airlines requires all furloughed workers to be recalled and receive their full salaries from Dec 1 through March 31, 2021.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

VIEW ALL

"We are already starting to work through the details of how we will bring back team members, but we're not over the finish line yet," American CEO Doug Parker and President Robert Isom said in a memo, adding that they hoped employees would receive paychecks by Dec 24.

The terms of the new assistance program mirror the initial package passed by Congress in March, which required larger airlines to repay 30 per cent of the payroll grants over time and offer the government warrants.

It also requires airlines to resume flying to some routes stopped after the first package expires, and gives the Transportation secretary authority until March 1, 2022 to require flights to small and remote communities that airlines served before the pandemic.

REUTERS

KEYWORDS IN THIS ARTICLE

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to  t.me/BizTimes

Transport & Logistics

SUPPORT SOUTH-EAST ASIA'S LEADING FINANCIAL DAILY

Get the latest coverage and full access to all BT premium content.

SUBSCRIBE NOW

Browse corporate subscription here