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US airlines to recall furloughed staff after stimulus bill

John BIERS
·3-min read

US airlines say they will rehire workers laid off during the pandemic after Congress late Monday passed a new economic relief package, but one large carrier warned that anemic travel demand means long-term employment prospects remain shaky.

After months of partisan wrangling, Congress finally approved the $900 billion stimulus just before midnight, which includes $15 billion in airline worker support payments and requires carriers to recall involuntarily furloughed employees, provide back pay and keep the workers on payroll through March 31, 2021.

Executives at United Airlines, which furloughed 13,000 workers, applauded the package, but described the status of rehired staff as temporary.

"We don't expect customer demand to change much between now and the end of the first quarter of 2021," United Chief Executive Scott Kirby and President Brett Hart said in a memo to staff.

"We just don't see anything in the data that shows a huge difference in bookings over the next few months. That is why we expect the recall will be temporary."

Airlines have been among the hardest hit sectors amid the Covid-19 crisis, and the virus has come back with a vengeance undermining hopes of a quick recovery as vaccines are deployed.

In the most recent demonstration of this phenomenon, more than 40 countries have suspended travel from Britain in a bid to contain a fast-spreading new strain of the coronavirus.

British Airways and Delta Air Lines said Monday they would require coronavirus tests for passengers flying to New York from Britain.

US air passengers counts currently run at about 40 percent of those in the year-ago period, according to federal checkpoint data. Airline executives have said they do not expect a full comeback until a vaccine is widely available and implemented.

Sara Nelson, president of the Association of Flight Attendants, who has lobbied for months for the funding, cheered passage on Twitter, saying it shows "what workers can do when we refuse to back down."

But Nelson said on CNBC that the comments from United about the jobs being temporary were "really inappropriate," adding that she would continue to fight for the jobs in January after Joe Biden is sworn in as president.

American Airlines, which furloughed 19,000 workers in October, said the funding "will enable us to bring furloughed team members back to work and resume air service to cities and towns that rely on us -- all at a critical moment," according to a statement from American executives.

Southwest said earlier this month it could furlough more than 6,800 workers in March or April in what would be carrier's first involuntary job cuts in its 50-year history.

A Southwest Airlines spokesman said the carrier was "very encouraged" by the congressional action, but that it had no "updates regarding the potential furloughs in 2021 to share at the moment."

Alaska Airlines Chief Executive Brad Tilden told CNBC the carrier planned to recall the fewer than 50 employees who were furloughed following the congressional action.

- Alaska Air ups Boeing order -

Aerospace giant Boeing has been hit by a two-pronged crisis stemming from the grounding of the top-selling 737 MAX following two deadly crashes, and the collapse of air travel amid the pandemic.

But with the recertification of the MAX it has received good news on orders in recent weeks.

Alaska said Monday it had restructured a plane purchase agreement with Boeing and will now order 23 more than 737 MAX planes.

The Boeing transaction repositions the carrier's fleet, moving the company away from Airbus planes and "towards a single mainline fleet that's more efficient, profitable and environmentally friendly," the company said in a press release.

Irish no-frills airline Ryanair early this month signed a deal to acquire 75 of the planes.

Tilden declined to elaborate on terms of the Boeing transaction, but told CNBC "it is a good time to buy" the MAX.

The order is the second for the MAX following a 20-month grounding.

Tilden said he was confident the MAX is now "extraordinarily safe" following a strict approval process involving the Federal Aviation Administration and other regulators.

jmb/hs