Senate bill would help airlines avoid layoffs

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The bill provides airlines with a pool of $25.5 billion to continue paying flight attendants and other employees beyond Oct. 1.
The bill provides airlines with a pool of $25.5 billion to continue paying flight attendants and other employees beyond Oct. 1.

A pair of Republican senators have introduced a bill that would preserve the jobs of airline industry employees through March.

The bill, introduced by Sen. Susan Collins (R-Maine) and Sen. Roger Wicker (R-Miss.), comes as airlines, led by American and United, prepare to lay off tens of thousands of workers on Oct. 1, when payroll support provided under the Cares Act expires.

The legislation would provide airlines with a pool of $25.5 billion in payroll support to last from Oct. 1 to March 31. Airline contracting companies, which typically employee catering workers and ground workers, would get an additional $3 billion in payroll assistance. Cargo carriers would get $300 million.

• Related: Airline CEOs converge on White House to ask for aid

In exchange, airlines would once again be prohibited from conducting involuntary furloughs, reducing pay rates or reducing benefits of employees, just as the Cares Act has required.

Industry unions and trade groups are praising the bill.

"For the tens of thousands of airline workers who have already received furlough notices starting on October 1, an extension of the Cares Act Payroll Support Program is necessary to keep them from being put out on the streets and in the unemployment line," the Air Line Pilots Association union said.

The White House and leadership in both houses of Congress have voiced support for continuing payroll support to airlines, which continue to grapple with an approximately 70% year-over-year drop in demand. However, the issue has been caught up in the broader dispute between Democrats and Republicans on Capitol Hill over a new Covid-19 stimulus package.

The Air Carrier Worker Support Extension Act, as the Collins-Wicker bill is called, would offer $500 million more in funding than airlines received in the Cares Act, even though carriers since that time have been successful at negotiating early retirement deals and various temporary leave and hours reduction agreements with employees and unions.

At Delta, for example, 20% of the workforce has accepted early retirement and more than 40,000 employees have taken long-term or short-term voluntary leaves of absence. At American, 12,500 employees have accepted early-out programs.

American, nevertheless, has said it will furlough 19,000 workers on Oct. 1 if additional government assistance isn't provided, while United said it expects to furlough more than 13,000 workers without that additional payroll aid.

At other airlines, furlough counts will be lower than had once been feared.

Southwest doesn't plan to lay off or furlough any workers this calendar year. Delta expects to avoid involuntary dismissals for flight attendants and U.S.-based ground employees. More than 1,900 pilots could still be furloughed, though the carrier said Tuesday that any such action will be delayed until Nov.1 as negotiations with the pilot union continues.

Frontier also isn't planning furloughs. Hawaiian plans less than 500 furloughs after negotiating voluntary early-outs or extended leave with 1,850 employees. The large regional airline Republic doesn't expect furloughs. Competitor SkyWest says it's still working with its labor groups to avoid furloughs. Alaska now expects less furloughs than the 4,200 it previously warned of. And Spirit says it now will have to furlough just a "small fraction" of the 2,500 people it had originally feared.

Meanwhile, Allegiant still might have to furlough up to 275 pilots but will not involuntarily release any flight attendants. JetBlue didn't respond to inquiries, but Reuters reported in July that the carrier expected to avoid widespread furloughs among frontline employees.

The $25 billion awarded by the Treasury Department in the original Cares Act was spread among 346 airlines, including many companies that cater to private business jet traffic. That market segment has fared much better than commercial airlines.

Flight activity in the private sector was down 21.2% year-over-year in August, according to the industry data tracker Argus.

This report was updated to include new developments regarding Delta and its pilots.

It was also corrected to say that SkyWest is working with its labor groups to avoid furloughs. The original report incorrectly stated that the carrier was working with employees' unions.

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