American Airlines begins return of workers after payroll relief

By Tracy Rucinski

CHICAGO (Reuters) -American Airlines is beginning the phased return of furloughed workers after the U.S. Congress passed a pandemic aid package with $15 billion in payroll support for airlines, its executives said in a staff memo on Tuesday.

“While pay and benefits will be restored right away, people will be asked to return to the operation in phases,” Chief Executive Doug Parker and President Robert Isom said in the memo, released by American.

Air passenger traffic is down by about 70% versus a year ago as the coronavirus pandemic continues to wreak havoc on the travel industry. U.S. airlines furloughed tens of thousands of employees when an initial $25 billion in federal payroll support that banned job cuts expired in October.

United Airlines executives warned on Monday that its recall of furloughed employees after the fresh aid would be “temporary,” saying “we just don’t see anything in the data that shows a huge difference in bookings over the next few months.”

American said the relief would help airlines serve passengers once the pandemic subsides, and in the nearer term, aid in the distribution of COVID-19 vaccines and other critical supplies.

Airlines have said they do not expect a robust travel recovery until vaccines or effective treatments are widely available.

American, which has furloughed nearly 19,000 employees since October, stands to receive roughly $3 billion from the payroll package, one person briefed on the matter said.

The new aid package includes similar conditions as the previous one, such as caps on executive compensation and share buybacks, and requires airlines to repay 30% of the payroll grants over time, offer the government warrants, and restore some routes.

The program could stave off job reductions for the time being at Southwest Airlines, which has asked unions to accept pay cuts to prevent its first-ever furloughs next year.

A Southwest spokesman said the company had no updates on the potential furloughs and would closely examine the final terms and conditions of the program once the bill becomes law.

Among other large U.S. carriers, Delta Air Lines avoided furloughs this year after reducing work hours for its largely non-union staff. Its unionized pilots agreed to pay cuts to avoid furloughs through 2021.

(Reporting by Tracy RucinskiEditing by Chris Reese; Philippa Fletcher and Bill Berkrot)

Top U.S. airlines starting 32,000 furloughs as bailout hopes fade

By Tracy Rucinski and David Shepardson

CHICAGO/WASHINGTON (Reuters) – American Airlines and United Airlines, two of the largest U.S. carriers, said they were beginning furloughs of over 32,000 workers on Thursday as hopes faded for a last-minute bailout from Washington.

Both airlines told employees, however, in memos seen by Reuters on Wednesday that they stood ready to reverse the furloughs, which affect about 13% of their workforces before the pandemic, if a deal was reached.

Tens of thousands of other employees at those airlines and others including Delta Air Lines and Southwest Airlines have accepted buyouts or leaves of absence aimed at reducing headcount as carriers battle a health crisis that has upended the global travel industry.

U.S. airlines have been pleading for another $25 billion in payroll support to protect jobs for a further six months once the current package, which banned furloughs, expires at midnight EDT.

Earlier, U.S. Treasury Secretary Steven Mnuchin said talks with House of Representatives Speaker Nancy Pelosi had made progress on a bipartisan aid plan, although no deal was reached and Senate Majority Leader Mitch McConnell called a $2.2 trillion coronavirus relief proposal “outlandish.”

In a memo to employees, American Chief Executive Doug Parker said Mnuchin told him that he and Pelosi were continuing to negotiate on a bipartisan COVID-19 relief package that would include an extension of aid for airlines and could reach an agreement in coming days.

“Unfortunately, there is no guarantee that any of these efforts will come to fruition,” Parker said.

American will furlough 19,000 employees, including some 1,600 pilots. More than 13,000 United employees will be on furlough, but not any pilots following an agreement reached this week.

“Tomorrow, tens of thousands of essential aviation workers will wake up without a job or healthcare and tens of thousands more will be without a paycheck,” Association of Flight Attendants-CWA President Sara Nelson said in a statement that urged lawmakers to reach a deal.

Nick Calio, who heads the airline trade group Airlines for America, said earlier that the industry was still pursuing all potential avenues for new assistance as time runs short.

“People keep talking, but we need results,” Calio told Reuters. “We are hopeful but not confident about them reaching a deal on a larger bill.”

U.S. airline shares ended flat on Wednesday.

Weeks of intense airline lobbying has won over many but not all Washington lawmakers, while drawing attention to the plight of other pandemic-hit industries as the crisis persists.

U.S. airlines are operating about half their 2019 flying schedules and suffering a 68% decline in passenger volumes.

The impact of the coronavirus on travel may cost as many as 46 million jobs globally, according to projections published on Wednesday by the Air Transport Action Group.

Airlines have argued they need trained employees to help drive an economic recovery as the pandemic subsides. American Airlines’ Parker told CNN he believed one more round of aid would be sufficient.

(Reporting by Tracy Rucinski and David Shepardson; Editing by Peter Henderson and Peter Cooney)

U.S. House Speaker Pelosi to meet with top U.S. airline CEOs

By David Shepardson and Tracy Rucinski

WASHINGTON/CHICAGO (Reuters) – House of Representatives Speaker Nancy Pelosi will speak on Friday afternoon with the chief executives of top U.S. airlines, who are urging Congress to approve another $25 billion in assistance to keep tens of thousands of U.S. workers on the payroll past Sept. 30, sources said.

Pelosi and House Transportation Committee Chairman Peter DeFazio are expected to hold a 2:45 p.m. EDT (1845 GMT) call with the chief executives of United Airlines, American Airlines, Delta Air Lines, Southwest Airlines, JetBlue Airways, Hawaiian Airlines, Alaska Airlines and others, a Democratic aide told Reuters.

In an interview with NBC’s “Today Show” on Friday, American Chief Executive Doug Parker urged lawmakers to “come together and get it done. … We just need people to do what’s right. I know we’re better than this, and our people deserve better.”

At the end of this month, the $25 billion in federal payroll assistance airlines received when the coronavirus first began spreading around the world is set to expire.

Airlines and unions are now pleading for a six-month extension as part of a bipartisan proposal for another $1.5 trillion in coronavirus relief, while simultaneously negotiating with employees to minimize thousands of job cuts that are expected without another round of aid.

White House Chief of Staff Mark Meadows met with major airline chief executives on Thursday. He said President Donald Trump is also open to a stand-alone measure to aid airlines, though congressional aides say that is unlikely to win support given aid requests from so many other struggling industries.

American has said it plans to end service to 15 small communities without additional government assistance and furlough about 19,000 workers.

Air travel has plummeted over the last six months as the coronavirus pandemic has claimed nearly 196,000 American lives and prompted many to avoid airports and planes, seriously depressing airline revenues.

Congress also set aside another $25 billion in government loans for airlines, but many have opted not to tap that funding source.

(Reporting by David Shepardson and Tracy Rucinski; editing by Jonathan Oatis)

Airline CEOs plead with White House to avert looming U.S. job cuts

By Jeff Mason and David Shepardson

WASHINGTON (Reuters) – White House Chief of Staff Mark Meadows met with major airline chief executives on Thursday as the industry braces for thousands of job cuts in two weeks, and urged lawmakers to embrace a $1.5 trillion coronavirus aid package proposed by a bipartisan congressional group and endorsed by President Donald Trump.

Meadows told reporters said that if House of Representatives Speaker Nancy Pelosi was willing to move a bill that would support airline workers and prevent layoffs, Trump would support it, noting the looming layoffs of thousands of workers set for Oct 1.

American Airlines Chief Executive Doug Parker said airlines would also be working with Pelosi.

​Meadows said the administration had examined executive action options, all of them less than ideal.

Airlines did not offer a new proposal but again made the case that helping avert airline job cuts was one good reason to pass a broad coronavirus relief bill.

After the meeting with Meadows, Parker said it was “not fair” that thousands of airline workers were about to be laid off. “We’re just here to plead with everyone involved to get to a quarterly package before October 1.”

Southwest Airlines Chief Executive Gary Kelly said the initial payroll support plan “didn’t go far enough and long enough.”

American has said it plans to end service to 15 small communities without additional government assistance.

At the end of this month the $25 billion in federal payroll assistance airlines received when the coronavirus first began spreading around the world is set to expire.

Congress also set aside another $25 billion in government loans for airlines, but many have opted not to tap that funding source.

Companies such as American are now pleading for a six-month extension while they simultaneously negotiate with employees to minimize thousands of job cuts that are expected without another round of aid.

Air travel has plummeted over the last six months as the coronavirus pandemic has claimed nearly 196,000 American lives and prompted many to avoid airports and planes, seriously depressing airline revenues.

(Reporting by Lisa Lambert, David Shepardson and Doina Chiacu; Editing by Steve Orlofsky and Jonathan Oatis)

United Airlines to cut 16,370 jobs as the pandemic rages

By Tracy Rucinski

CHICAGO (Reuters) – United Airlines is preparing to furlough 16,370 workers when federal aid expires on Oct. 1 as the coronavirus pandemic continues to devastate the airline industry, it said on Wednesday.

Chicago-based United had over 90,000 employees before the pandemic brought the industry to a near standstill in March. It warned in July that 36,000 jobs were at risk of involuntary furloughs as demand remained weak.

Some 7,400 employees have opted to take early retirement or departure packages and the company is working through several other voluntary temporary leave programs to further reduce the number of furloughs, United officials said.

The leaves would give the company flexibility to call back staff once travel returns, they said.

Airlines received $25 billion in U.S. government stimulus funds in March meant to cover payrolls and protect jobs through September, when the industry had hoped for a rebound.

As bailout money runs out without a travel recovery in sight, airlines and unions have lobbied Washington for another $25 billion but talks have stalled as Congress has struggled to reach agreement on a broader coronavirus assistance package.

U.S. passenger airlines are still collectively losing more than $5 billion a month as 30% of planes remain parked. Passenger travel demand is down about 70% and, on average, planes that are flying are half-full.

United’s schedule for September is 63% smaller than a year ago.

United’s cuts will affect around 2,850 pilots, 6,920 flight attendants, 2,010 mechanics and 1,400 management and administrative positions, among others, though negotiations continue with pilots to reduce the final number.

Rival American Airlines last week said it would lay off 19,000 workers without federal aid. Including voluntary departures or leaves, its 140,000 pre-pandemic workforce will shrink by 30%.

Delta Air Lines plans to lay off nearly 2,000 pilots without wage concessions, but has not said how many jobs for workers including flight attendants and mechanics are at risk.

President Donald Trump has said his administration would help U.S. airlines but has not given any details.

Congress also approved another $25 billion in loans for airlines under the first stimulus package, but not all of them are tapping the funds.

(Reporting by Tracy Rucinski in Chicago; Editing by Matthew Lewis and Richard Chang)

White House says Trump could act unilaterally to avoid U.S. airline layoffs

WASHINGTON (Reuters) – President Donald Trump could take executive action to avoid massive layoffs at U.S. airlines, while the coronavirus pandemic weighs on air travel and talks on a new COVID-19 stimulus bill remain stall in Congress, White House Chief of Staff Mark Meadows said on Wednesday.

“We’re looking at other executive actions,” Meadows said in an online interview with Politico. “If Congress is not going to work, this president is going to get to work and solve some problems. So hopefully, we can help out the airlines and keep some of those employees from being furloughed.”

His remarks came a day after American Airlines said its workforce will shrink by 40,000, including 19,000 involuntary cuts, in October without an extension of government aid.

Meadows said he has spoken to American Airlines, as well as United Airlines, which has warned that 36,000 jobs are on the line, and to Delta Air Lines, which announced furloughs of nearly 2,000 pilots on Monday.

“So we’ve raised this issue. It would take a CARES package, I believe, to do it,” Meadows said, referring to a $3 trillion coronavirus relief package that Congress passed earlier this year.

Talks between Meadows, Treasury Secretary Steven Mnuchin, House of Representatives Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer ended in early August, with top Democrats and the administration far apart on new legislation. Meadows told Politico that he is not optimistic that negotiations will restart soon.

(Reporting by David Morgan; Editing by Chizu Nomiyama and Alistair Bell)

EPA approves a virus-killing coating for American Airlines, studies use by schools

By Tracy Rucinski

CHICAGO (Reuters) – The U.S. Environmental Protection Agency said on Monday it has granted emergency approval for American Airlines to use a disinfectant against the coronavirus on certain surfaces that lasts for up to seven days, and is studying whether it could be effective in places like schools.

EPA Administrator Andrew Wheeler said at a news briefing that SurfaceWise2, made by Allied BioScience Inc, is the first long-lasting product approved by the agency to help fight the spread of the novel coronavirus.

American Airlines will begin spraying its airplane cabins with the disinfectant in its home base of Texas after the state filed the request for emergency approval. The carrier hopes to eventually use it across its entire fleet, including its American Eagle regional partners.

The spray does not eliminate the need for cleaning, officials said.

Southwest Airlines, also based in Texas, has been using a two-step process in its cabins that involves an EPA-approved disinfectant spray followed by a separate antimicrobial spray that coats surfaces for at least 30 days.

Reuters first reported on Sunday emergency approval of SurfaceWise2 for use by American and by Texas-based Total Orthopedics Sports & Spine’s two clinics for up to a year.

Airlines have rolled out deeper cleaning and disinfecting of airplanes and airport facilities in an effort to convince people that it is safe to resume flying during the pandemic.

(Reporting by Tracy Rucinski; Editing by Chizu Nomiyama and Bill Berkrot)

American Airlines, Delta, United to require facial coverings on U.S. flights

By David Shepardson and Tracy Rucinski

WASHINGTON (Reuters) – Three of the largest four U.S. airlines said Thursday they will require passengers to wear facial coverings on U.S. flights, joining JetBlue Airways Corp in taking the step to address the spread of the coronavirus and convince reluctant passengers to resume flying.

United Airlines, Delta Air Lines Inc and American Airlines Group Inc , along with the smaller Frontier Airlines, which is owned by private equity firm Indigo Partners LLC, announced they will require facial coverings next month.

Delta and United’s new rules start May 4, while Frontier’s start May 8 and American’s requirements begin May 11. The policies exempt young children from wearing masks or other facial coverings.

Many U.S. airlines are also requiring pilots and flight attendants to use facial coverings while on board aircraft.

Airlines in the United States have seen a nearly 95% drop in U.S. passengers and have slashed flight schedules. They are now working to reassure customers about the safety of air travel by instituting new cleaning and social distancing procedures.

Some airline unions and U.S. lawmakers have urged the Federal Aviation Administration (FAA) to require facial coverings for all passengers and crew.

United said it will provide complimentary masks to passengers. Southwest Airlines Co <LUV.N>, one of the largest U.S. airlines, has not required facial coverings.

The FAA has declined to implement the requirement, and it is not clear if the agency has the authority to compel passengers to wear face masks. The FAA said Wednesday it is “working with air carriers to ensure they have processes in place for addressing public health risks for their crews and passengers.”

Representative Peter DeFazio, who chairs the House Transportation Committee, called on the FAA Wednesday to “require masks or other face coverings for all crewmembers and passengers on U.S. flights” and to require airlines “adopt reasonable, sound procedures for ensuring that passengers are spaced at safe distances from one another.”

Delta said the airline will require face coverings “starting in the check-in lobby” and at “Delta Sky Clubs, boarding gate areas, jet bridges and on board the aircraft for the duration of the flight – except during meal service.”

Delta added their use “is also strongly encouraged in high-traffic areas, including security lines and restrooms. People unable to keep a face covering in place, including children, are exempt.”

American said the rules will prioritize “customer and team member well-being.”

German airline group Lufthansa  also said this week it would require facial coverings for all passengers starting May 4.

Sara Nelson, international president of the Association of Flight Attendants union, praised the carriers adopting the requirements and added “absent federal action, we need every airline to require passengers wear face coverings to keep everyone safe in aviation.”

(Reporting by David Shepardson; Editing by Chris Reese and Aurora Ellis)

Delta, American suspend all China flights as U.S. government takes action

By David Shepardson and Tracy Rucinski

WASHINGTON/CHICAGO (Reuters) – Delta Air Lines Inc and American Airlines Group Inc decided on Friday to temporarily suspend all remaining U.S.-China flights after the U.S. State Department elevated a travel advisory over concerns about the coronavirus.

U.S. officials were due to hold a call with airlines later on Friday to discuss the Chinese flights. Some airline officials worried that if they did not voluntarily halt flights it would prompt the Trump administration to take formal action, potentially complicating any subsequent flight resumption.

The United States told citizens on Thursday not to travel to China due to the epidemic that has infected nearly 10,000 people and been declared a global emergency.

Pilots and flight attendants have been demanding airlines stop flights to the country, with American Airlines’ pilots filing a lawsuit on Thursday seeking an immediate halt.

“The decision to file a lawsuit was made out of concern for the safety of our pilots,” said Dennis Tajer, a spokesman for the Allied Pilots Association which represents American’s pilots.

As of Thursday United Airlines Holdings Inc was still planning to operate some flights from San Francisco, even after its pilots union told its members they would be allowed to drop their trip without pay if they were concerned about flying to the country.

Delta and American had both announced lighter schedules to China earlier this week.

On Friday, American said operations to and from China would be halted starting on Friday through March 27. The carrier will continue to fly to Hong Kong.

Delta said its last China-bound flight departing the United States will leave on Monday, Feb. 3, with the last U.S. return flight departing China on Feb. 5.

The Delta suspension is set to last through April 30.

U.S. airline shares have posted heavy losses this week on concerns of the financial impact of the virus.

Other airlines that have stopped their flights to mainland China include Air France KLM SA, British Airways, Germany’s Lufthansa and Virgin Atlantic.

Major Chinese carriers were still operating flights to and from the United States as of Friday.

(Reporting by David Shepardson and Tracy Rucinski; Editing by Nick Zieminski and Tom Brown)

Pilots, flight attendants demand flights to China stop as virus fear mounts worldwide

By Tracy Rucinski and Laurence Frost

CHICAGO/PARIS (Reuters) – Pilots and flight attendants are demanding airlines stop flights to China as health officials declare a global emergency over the rapidly spreading coronavirus, with American Airlines’ pilots filing a lawsuit seeking an immediate halt.

China has reported nearly 10,000 cases and 213 deaths, but the virus has spread to 18 countries, mostly, presumably, by airline passengers.

The United States has advised its citizens not to travel to China, raising its warning to the same level as those for Iraq and Afghanistan.

U.S. airlines, which have been reducing flights to China this week, were reassessing flying plans as a result, according to people familiar with the matter.

It is possible the White House could opt to take further action to bar flights to China in coming days, but officials stressed that no decision has been made.

The Allied Pilots Association (APA), which represents American Airlines pilots, cited “serious, and in many ways still unknown, health threats posed by the coronavirus” in a lawsuit filed in Texas, where the airline is based.

American said it was taking precautions against the virus but had no immediate comment on the lawsuit. On Wednesday, it announced flight cancellations from Los Angeles to Beijing and Shanghai, but is continuing flights from Dallas.

APA President Eric Ferguson urged pilots assigned to U.S.-China flights to decline the assignment. In a statement, the American Airlines’ flight attendants union said they supported the pilots’ lawsuit and called on the company and the U.S. government to “err on the side of caution and halt all flights to and from China.”

Pilots at United Airlines, the largest U.S. airline to China, concerned for their safety will be allowed to drop their trip without pay, according to a Wednesday memo from their union to members.

United announced on Thursday another 332 U.S.-China flight cancellations between February and March 28, though it will continue operating round trip flights from San Francisco to Beijing, Shanghai and Hong Kong.

The American Airlines pilot lawsuit came as an increasing number of airlines stopped their flights to mainland China, including Air France KLM SA, British Airways, Germany’s Lufthansa and Virgin Atlantic.

Other major carriers have kept flying to China, but protective masks and shorter layovers designed to reduce exposure have done little to reassure crews.

‘COUNTDOWN’

A U.S. flight attendant who recently landed from one major Chinese city said a big concern is catching the virus and spreading it to families, or getting quarantined while on a layover.”I didn’t understand the gravity of the situation until I went there,” she said on condition of anonymity, describing general paranoia on the return flight, with every passenger wearing a mask.

“Now I feel like I’m on a 14-day countdown.”

Thai Airways is hosing its cabins with disinfectant spray between China flights and allowing crew to wear masks and gloves.

Delta Air Lines is operating fewer flights and offering food deliveries so crew can stay in their hotels. The carrier is also allowing pilots to drop China trips without pay, a memo from its union to members said.

Korean Air Lines Co Ltd and Singapore Airlines are sending additional crew to fly each plane straight back, avoiding overnight stays.

The South Korean carrier also said it was loading protective suits for flight attendants who might need to take care of suspected coronavirus cases in the air.

Airlines in Asia are seeing a big drop in bookings along with forced cancellations because of the coronavirus outbreak, the head of aircraft lessor Avolon Holdings Ltd said, adding the impact could last for some months.

The outbreak poses the biggest epidemic threat to the airline industry since the 2003 SARS crisis, which led to a 45% plunge in passenger demand in Asia at its peak in April of that year, analysts said.

Fitch Ratings said airlines with more moderate exposure to China and the Asia-Pacific region were likely to be able to re-deploy capacity to alternative routes to mitigate the effect on traffic, but that could increase competition on those routes and reduce airfares.

Air France, which maintained China flights throughout the SARS epidemic, suspended its Beijing and Shanghai flights on Thursday after cabin crews demanded an immediate halt.

“When the staff see that other airlines have stopped flying there, their reaction is ‘Why are we still going?’,” said Flore Arrighi, president of UNAC, one of the airline’s four main flight attendants’ unions.

(Reporting by Tracy Rucinski, Laurence Frost and David Shepardson; Additional reporting by Allison Lampert in Montreal, Aradhana Aravindan, John Geddie and Anshuman Daga in Singapore, Chayut Setboonsarng and Panu Wongcha-um in Bangkok, Caroline Pailliez in Paris, Josephine Mason in London, Jamie Freed in Sydney and Joyce Lee in Seoul; Writing by Jamie Freed and Tracy Rucinski; Editing by Marguerita Choy and Lisa Shumaker)