With the recent spike in coronavirus cases in the US, people are on the verge of losing their jobs and hence, their health insurance, The Washington Post reported.
On Wednesday, the United Airlines announced that it may soon have to lay off as many as 36,000 employees out of its 95,000 staff around the world.
In a memo sent to its employees, the airlines was quoted as saying, "The reality is that United simply cannot continue at our current payroll level past October 1 in an environment where travel demand is so depressed. And involuntary furloughs come as a last resort, after months of companywide cost-cutting and capital-raising."
The United made these announcements despite the government grants received through the $2 trillion Cares Act requiring the airlines to keep front-line workers on the job through September 30. United Airlines received $4.9 billion in grants and signed a letter of intent to accept about $4.5 billion in loans through the law.
However, the executives have reportedly said the hike in demand for air travel is unlikely to return in 2020 and hence, they are forced to warn their employees of possible layoffs.
It is feared that more airlines will be forced to follow the suit if the vaccines for coronavirus does not come soon.
Though the decision to reopen the US economy amid the coronavirus pandemic has boosted up the demand for air travel, but it remains far below 2019 levels. According to The Washington Post, the International Air Transport Association in its June forecast had estimated that carriers worldwide would lose $84.3 billion in 2020.
Joe DePete, President of the Air Line Pilots Association, International, representing more than 63,000 pilots at 34 airlines in the US and Canada, was quoted as saying: "The economic impact COVID-19 has had on the airline industry has been profound for the workers who keep our skies safe and our world connected. Unfortunately, in the past few weeks, thousands of pilots and crew members have received furlough notices and absent congressional action, it is likely that there will be more to come."
As the US airlines and cargo carriers directly employ about 750,000 people worldwide, a call has been made to Congress demanding extension of the payroll support offered through the Cares Act as the layoffs in the aviation sector will cripple the entire economy.
"Should October 1 arrive without extending the [Payroll Support Program] grant job program mass layoffs are inevitable, as airline executives have acknowledged. Hundreds of thousands of workers will lose their jobs and health insurance -- not only in aviation but across our entire economy," the union officials said in a letter last month to Democratic and Republican leaders on Capitol Hill.
"Airline industry employment cannot simply be put back together overnight and mass layoffs will do great damage to the sector, with potentially irrevocable consequences."
Sara Nelson, President of the Association of Flight Attendants-CWA, was quoted as saying: "Congress must extend the PSP in order to avoid hundreds of thousands of layoffs from an industry that normally drives economic activity for every other sector and supports more than 11 million jobs. Failing to maintain this successful jobs program will have a ripple effect across the economy. Conversely, a clean extension of the program helps prime us for economic recovery." (ANI)