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Airlines warn of catastrophe without immediate aid
The major U.S. airlines are warning that a massive federal bailout is needed to keep their employees on the job during the coronavirus crisis, with thousands of layoffs already announced at the three New York-area airports.
Further large-scale payroll cuts are imminent unless Washington delivers a multibillion-dollar aid package in the next 10 days as the virus continues to undermine demand for air travel from coast to coast, the airlines say. The plummeting industry is seeking $60 billion to keep things going smoothly.
“If Congress doesn’t act on sufficient government support by the end of March, our company will begin to take the necessary steps to reduce our payroll in line with the 60% schedule reduction we announced for April,” said the top brass at United Airlines in a Friday letter to employees.
American Airlines and its labor unions, in a joint letter to policymakers, declared that “governmental assistance, with appropriate conditions, is an essential component of our path to sustainability and recovery.”
The White House has signaled its willingness to act, but critics say a cash “bailout” is unwarranted — arguing the carriers previously rewarded shareholders and bought back stock when it should have been saving cash.
Either way, there’s no denying coronavirus is crippling the industry.
Only 624,000 people passed through airport security checkpoints on Thursday, down sharply from the 2.4 million people tallied on the same day last year, said the Transportation Safety Administration. It was the lowest number of outbound passengers ever recorded by the agency created after the 9/11 terror attacks.
“Demand is dropping by the hour as public safety orders are becoming more and more draconian,” Robert Mann, an aviation expert at R.W. Mann & Co. on Long Island, told the Daily News. “If this goes on more than eight or 10 weeks, this becomes an existential crisis for the industry. There would be no revenue.
“The thing falls apart geometrically,” he continued, referring to the global network of air travel and all its regulations. “Eventually we could reach a point where we no longer offer enough service to keep pilots current and legal. They’ll lose their qualifications and require retraining.”
The news for New York City’s three major airports is especially grim, he said.
“It’s conceivable the number of jobs that will be affected in some way is in the six figures, when you talk about the three airports together,” said Mann.
New York is a base for a large number of airline staff, along with all the third-party contractors serving the carriers as well as workers involved in airport retail, parking and transportation, he said.
“If you’re only catering half the number of meals, you only need half the number of drivers, half the number of people preparing the food,” he said. “There will be far fewer hours worked.”
Within hours of Mann’s comments, 600 workers at LaGuardia, 750 at JFK and 120 Newark airports learned Friday that they were laid off.
The employees, most of them members of Service Employees International Union Local 32BJ, are subcontractors for airlines. They work as baggage handlers, terminal and cabin cleaners, assist wheelchair passengers and hold customer service positions. Most earned $15.60 per hour, according to the union.
“This week, airlines asked the government to give them a $60 billion bailout in the form of loans, grants and tax relief,” said Kyle Bragg, president of 32BJ. “The contracted airport workers receive nothing. They earn the least yet risk themselves the most. Many lack health care to even care for themselves in the face of this pandemic.
“While the president signed legislation granting paid sick leave to workers, this law doesn’t apply to the contracted airport workers because many are employed by companies with 500 or more employees.”
A White House proposal called for $50 billion in unsecured loans but no grants.
Delta Air Lines — the dominant carrier at Kennedy and LaGuardia airports — plans to reduce its European service by 80% and will slash service systemwide by 70%.
Queens-based JetBlue — another big carrier at Kennedy — said it is reducing seating capacity by 40% in April and May, with further cuts expected in June and July. The company says it has a new credit line of $1 billion it hopes will help tide it through the crisis.
American Airlines, the largest U.S. carrier, already said it was forced to begin cargo-only flights between the U.S. and Europe.
With negotiations ongoing Friday, airlines were continuing to push for taxpayer cash — not just loans — to pull out of the tailspin. JetBlue says it will need “significant government support to help us through these losses.”