Renewed coronavirus concerns hit airlines
FOX Business’ Jeff Flock reports on how airlines are faring during the coronavirus outbreak and how the industry responded to Director of the National Institute of Allergy and Infectious Diseases Dr. Anthony Fauci saying he wouldn’t fly or eat at restaurants right now.
Delta CEO Ed Bastian sent a memo to employees Thursday to thank the 17,000 Delta workers who agreed to take voluntary departure packages, a significant number of which are departing this week.
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“I know these were difficult, personal decisions for everyone and their families. Each person who has opted to exit voluntarily moves us closer to our goal of minimizing furloughs and positioning Delta to weather the choppy recovery in the months and years ahead,” Bastian wrote in the memo, which was obtained by FOX Business.
The CARES Act set aside $25 billion for passenger airlines with the condition that they won’t furlough any workers until Oct. 1. As that deadline approaches, airlines have been trying to entice employees to voluntarily leave through enhanced retirement and exit packages. Despite thousands of employees leaving, airlines are already notifying employees they might be furloughed.
SPIRIT AIRLINES SAYS 20% TO 30% OF WORKERS AT RISK OF FURLOUGHS
American Airlines executives said in a memo to employees earlier this month that 24,285 workers have been notified they could potentially be furloughed when the CARES Act deadline hits at the end of September.
That’s despite the fact that “41,000 team members have opted for early retirement, a reduced work schedule or a partially paid leave,” according to American Airlines' second-quarter earnings report.
The government bailout of airlines was supposed to stop any furloughs from happening, as most lawmakers and industry leaders thought travel demand would pick back up by the time funding ran out in the fall. Unfortunately, the coronavirus pandemic is still raging in large parts of the country with no signs of slowing down.
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“Our passenger revenues in June, while we believe are better than others in the industry, were more than 80% lower than June 2019. And with infection rates increasing and several states reestablishing quarantine restrictions, demand for air travel is slowing again,” American Airlines executives wrote in the memo, which was obtained by FOX Business.
Now, many lawmakers and airlines are calling for an extension of the funds that were given to airlines. Reuters reported this week that a majority of House lawmakers support an extension of the funding. The Air Line Pilots Association, the largest airline pilot union in the world, warned Wednesday that “failure to extend the program will result in the loss of hundreds of thousands of U.S. aviation jobs.”
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