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Airline employee furloughs begin as existing federal funding ends

Without a new deal on Capitol Hill, American Airlines and United Airlines begin employee furloughs.

CHARLOTTE, N.C. — American Airlines and United Airlines say they will begin to furlough 32,000 employees after lawmakers and the White House failed to agree on a broad pandemic relief package that includes more federal aid for airlines.

American Airlines CEO Doug Parker said that if Washington comes up with a deal with $25 billion for airlines “over the next few days,” the company will reverse 19,000 furloughs set to begin Thursday and recall the workers.

Heading into the holidays airline cuts of any kind are bad news for flyers and anyone working at almost any airlines.  Charlotte is an American hub and  thousands of jobs hang in the balance at both American Airlines and United Airlines.

On the topic of a Capitol Hill deal helping keep the airlines in the air, Parker told a cable news outlet that he is hopeful a deal will come soon. Thousands of American Airlines employees could be out of work on furlough by the weekend.

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“We will reverse any furlough processes and recall any impacted team members” Parker told employees in a letter about the coming furloughs referencing a deal happening," he said.

RELATED: American, United cutting 32,000 jobs as coronavirus aid deal stalls in Congress

No plan from Congress could put the economic recovery into a tailspin before the election. 

The latest numbers from the Department of Labor still show improvement. Nationally, initial unemployment claims last week were 837,000 that’s down 36,000 from the week before.

However, people seeking pandemic unemployment assistance went up by almost 35,000 claims.

RELATED: United to start offering rapid COVID-19 tests for some passengers

Here in North Carolina, initial unemployment claims dropped by slightly more than 15 hundred and the number of people now collecting unemployment dropped by 18,512.

In March, Congress approved $25 billion mostly in grants to cover passenger airline payrolls through September and up to another $25 billion in loans that the airlines could use for other purposes. Late Tuesday, the Treasury Department said it completed loans to seven major airlines: American, United, Alaska, JetBlue, Frontier, Hawaiian and SkyWest.

American now expects to borrow $5.5 billion from the Treasury, and United can get $5.17 billion. Airlines have also borrowed billions from private lenders. They could use that money to keep employees — as critics like de Rugy suggest they should — but they are trying to cut spending in case ticket revenue remains severely depressed for a long time.

U.S. air travel remains down nearly 70% from a year ago. Signs of a modest recovery faded this summer when COVID-19 cases spiked in many states. Traditionally lucrative business and international travel are even weaker than domestic leisure flying.

The Associated Press contributed to this report