US airlines lay off thousands of staff as federal relief ends

American airlines jets in Washington in April 2020Image source, Reuters
Image caption,
Air travel has been devastated by a fall in demand during the pandemic

US airlines have begun laying off thousands of workers after efforts to negotiate a new economic relief plan in Congress stalled.

American Airlines says it shedding 19,000 workers and United Airlines 13,000.

The carriers - badly hit by the coronavirus pandemic - say they are ready to reverse the decisions if more financing is found.

The airlines have received billions of dollars from the federal government.

Congress agreed the aid agreed earlier in the year as part of the Coronavirus Aid, Relief, and Economic Security Act [Cares Act]. It was conditional that the carriers did not lay off workers until 1 October.

Airlines worldwide have been hit by a massive fall in demand caused by the pandemic.

In a letter to staff announcing the layoffs, American Airlines Chief Executive Officer Doug Parker said: "I am extremely sorry we have reached this outcome. It is not what you all deserve."

On Wednesday United Airlines, in a message to its employees, said it was imploring "our elected leaders to reach a compromise, get a deal done now, and save jobs".

Media caption,
Coronavirus: How to fly during a global pandemic (this video reflects the rules before the hotel quarantine was introduced in the UK)

"In a continuing effort to give the federal government every opportunity to act, we have made clear to leadership in the administration, Congress and among our union partners that we can and will reverse the furlough process if the Cares Act Payroll Support Program is extended in the next few days."

It added: "To our departing 13,000 family members: thank you for your dedication and we look forward to welcoming you back."

The layoffs increase pressure on Treasury Secretary Steven Mnuchin and House of Representatives Speaker Nancy Pelosi who have been trying to agree on a follow-up relief plan for the struggling US economy.

Democrats, who control the House, have been pushing for a $2.2tn (£1.7tn) package while the White House wants to keep it to $1.6tn. The most recent proposal includes $20bn for struggling airlines.

On Thursday House Democrats debated the impasse. The Senate, however, adjourned until Monday evening, Reuters reported, suggesting that an end to the deadlock was not close.

A spokesman for Ms Pelosi said "distance on key areas remain", following a 50 minute phone call with Mr Mnuchin on Thursday afternoon.