American Airlines flight attendant Aaron Cuevas doesn’t know whether he’ll have a job next week. He doesn’t even know whether he should look for a new one, or wait to find out how long unemployment might last.
Starting next week, American Airlines could begin furloughing 17,500 flight attendants, pilots, mechanics, ramp workers, and other employees.
Across the airline industry, about 80,000 workers are holding notices telling them time is coming due for carriers to say goodbye if Congress doesn’t pass another payroll extension grant. Airline executives and union leaders say they are still hopeful to get a deal completed by the end of September, but time was running out as various sides held talks Wednesday.
The changes are coming the fastest at American Airlines — the dominant carrier at Philadelphia International Airport — which is staring at more debt and more overhead than its competitors.
What could happen after Thursday, and in the weeks to come, will change flying for both passengers and employees.
“It is stressful,” said Cuevas, who got a job with American four years ago after eight years in the Army. “Do you move forward with life?”
Thursday is the day when the restrictions end that came with the $25 billion in CARES Act funding from late March. That prohibited airlines from laying off or furloughing employees and cutting pay. American Airlines took $5.1 billion in grants and nearly $7.2 billion in loans. Southwest Airlines got $2.2 billion in grants and $947 million more in loans.
As those restrictions were about to be lifted, airlines are in worse condition than they thought they would be in spring or early in summer.
Congress was deadlocked on an extension amid a larger fight over a multitrillion-dollar stimulus package that includes funding for small businesses, unemployment aid, and relief for cash-strapped states.
Next week, joining American’s workers at risk are 13,000 employees of competitor United Airlines. Delta Air Lines postponed furlough talk until November, and Southwest Airlines said it will be able to make it through the end of 2020. Smaller airlines issued furlough notices to about 11,000 workers.
Passenger traffic is still down about 70% compared with a year ago, according to Transportation Security Administration data. Those numbers have only modestly improved since early July, forcing airline executives to face the financial truth that they’re running companies with only one-third of the customers they were built to handle.
Airlines have been cutting flights since March, but carriers have been more aggressive with reductions for October. Southwest trimmed back its schedule to about 50% of last year’s capacity.
“What I would predict now is that I don’t see that changing significantly from here until we get a vaccine,” Southwest CEO Gary Kelly said in early September. “Until we get to that point, I wouldn’t expect us to see a significant improvement in our traffic. That will be sometime in 2021 at best.”
Southwest is also doing less point-to-point flying than it has in the past, meaning there is a greater likelihood that customers will have to connect once or twice to get to their final destination.
American has said it will cut service to 12 smaller destinations in October, with two more that could lose service with federal approval. Cities such as Del Rio, Texas, and Huntington, W.Va., could lose service from the only major airline serving those communities.
Starting Thursday, American Airlines is also cutting one or two flight attendants on many of its longer flights or on larger planes, citing a need to adjust to the new reality of flying more efficiently.
Without federal payroll grants, American said it needs only 11,700 flight attendants, compared with 27,000 before the pandemic. About 8,100 flight attendants are scheduled to be furloughed.
“We’ve sized the airline over the next couple of months based on demand,” said American Airlines chief operating officer David Seymour. “We had to have a contingency plan thinking that we won’t get the Payroll Support Program.”
American Airlines also parked 100 planes in short-term storage in anticipation of less demand in October, a typically slow month before traffic picks up again in November for Thanksgiving. But crews are still needed to maintain those planes, Seymour said.