US Airlines continue to lay off employees despite $ 25 billion federal aid
Despite huge subsidies from the US government, American Airlines and Delta Air Lines notified management and support staff of upcoming forced cuts. According to CNBC, airlines plan to cut staff to 30 percent, given that nearly 40,000 employees were sent on unpaid leave and early retirement due to a pandemic.
According to a company memo that was viewed by CNBC, management notified employees that layoffs were inevitable and encouraged workers to voluntarily leave their jobs.
“Although our pre-pandemic liquidity, the significant financial assistance provided by the government, and the cash we’ve raised in the capital markets provide a foundation for stability, we need to reduce our cost structure, including our most significant expense — the cost of compensation and benefits,” Elise Eberwein, American’s executive vice president of people and global engagement, said in the staff note.
The coronavirus crisis has already irreversibly changed the US labor market. In particular, in the industry of passenger flights, many small airlines have declared bankruptcy and closure even before the peak of the pandemic.
Larger carriers refused the $ 50 billion help from the White House in the form of a loan and demanded $ 29 billion in non-refundable grants in order to save jobs. As a result, their requirements were met, but as you can see, this did not save ordinary employees, like flight attendants, from losing their jobs.
To date, the average unemployment rate in the United States has reached 14.7 percent, which is equivalent to 41 million people over the past 8 eight weeks of the coronavirus pandemic.
In their own defense, airlines say that future reductions are caused by low demand for air travel. Obviously, these forecasts were taken into account when demanding $ 29 billion from the government, and here the society asks a reasonable question: did the airlines hide massive cuts to get federal aid or did the government know that thousands of employees would be left without income and donated to enrich multibillion-dollar companies?
Management and support staff will have until the end of June 10 to apply for the buyout and American is offering volunteers a third of their pay through the end of 2020 and five years of travel privileges. Employees that are laid off after Oct. 1 will not receive a severance, according to another company memo viewed by CNBC.
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