American Airlines (AAL) - Get American Airlines Group, Inc. Report will begin furloughing 19,000 employees and United Airlines (UAL) - Get United Airlines Holdings, Inc. Report will lay off 13,000 workers after lawmakers failed to agree on a coronavirus relief package.
The airlines, however, said they would reverse the cuts if the U.S. government provided the funds the industry needs over the next few days.
A coronavirus aid proposal put forward by House Democrats earlier this week includes $25 billion in payroll aid for airlines, which have suffered from a steep fall in travel demand during the pandemic.
“I am extremely sorry we have reached this outcome,” said American CEO Doug Parker in a letter to employees. “It is not what you all deserve.”
The airline industry had received $25 billion in funding under the CARES Act that was enacted in March but had to promise not to cut jobs until Oct. 1.
“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,” said Sara Nelson, president of the Association of Flight Attendants-CWA, in a statement on Wednesday evening. "They don't know how they will pay rent, feed their families, or cover the cost of their prescriptions or medical care. It did not have to be this way."
Reports said Treasury Secretary Steven Mnuchin had asked the airlines to delay furloughing workers as lawmakers tried to reach agreement on an aid package.
American shares rose 1.97% to $12.53 in trading Thursday, while United was up 0.46% to $34.91.