Pelosi asks airlines to pause furloughs, vowing additional aid, but no deal yet

A United Airlines plane takes off above American Airlines planes on the tarmac at Los Angeles International Airport (LAX) on October 1, 2020.

Mario Tama | Getty Images

House Speaker Nancy Pelosi on Friday asked airlines to hold off on tens of thousands of job cuts that started this week, vowing additional aid for the battered sector, but a deal couldn’t be reached by the end of the week.

Pelosi’s comments came a day after airlines started furloughing more than 33,000 employees after the terms of a $25 billion federal payroll support package passed in March expired. That aid, meant to help airlines cope with a plunge in bookings because of the coronavirus pandemic, prohibited job cuts until Oct. 1.

Pelosi said the additional aid could be part of a standalone bill just for airline support or a broader bill.

“As relief for airline workers is being advanced, the airline industry must delay these devastating job cuts,” Pelosi said in a statement.

But Rep. Peter DeFazio, D-Ore., chairman of House Committee on Transportation and Infrastructure was unable to get through a vote by unanimous consent for legislation to provide more aid for airline payrolls.

Other options include another standalone bill that was introduced by two Senate Republicans last month and a broad coronavirus package that has been fraught with disagreements between House Democrats and the Trump administration.

Airlines have pleaded with lawmakers and the White House in recent weeks for $25 billion more to preserve jobs through March 2021 after a significant rebound in travel failed to materialize over the summer. The proposal for more federal airline support won bipartisan backing, but has been called into question after talks for a national coronavirus relief package that could include that faltered this week, prompting airline to begin their furloughs.

Airline shares gained on Pelosi’s comments, but were off the day’s highs in the afternoon. Shares of American Airlines, which Thursday started furloughing 19,000 workers, more than any U.S. airline, were up more than 2%. United Airlines shares were 1.6% higher. The Chicago-based carrier announced more than 13,000 furloughs this week. 

The two airlines make up the vast majority of the planned furloughs and told employees this week that they would reverse course if Congress approves the additional $25 billion in payroll support.

“As we said earlier this week, we are eager to reverse the furlough process once Congress has passed legislation to extend the CARES Act Payroll Support Program, but they need to act quickly,” United said in a statement on Friday. “We’re hopeful that the widely expressed, bipartisan support for saving airline jobs will lead to a legislative breakthrough soon.”

Job losses across the industry are much higher than the more than 33,000 airlines started furloughing after tens of thousands of others accepted buyouts and temporary leaves of absence airlines urged as they scrambled to cut costs.

Southwest Airlines doesn’t expect to have to furlough workers this year for that reason but CEO Gary Kelly warned employees Thursday that without additional aid, job and pay cuts are possible in the future. Delta Air Lines CEO Ed Bastian said the carrier doesn’t expect to furlough workers, with the exception of pilots, though it’s negotiating a cost-cutting plan with the pilots’ union.

More than 17,000 of Delta’s workforce opted to leave the company permanently, about a fifth of its pre-pandemic staff.