Layoffs imminent for thousands of Philly airline workers if Congress doesn't extend payroll aid

PHILADELPHIA (KYW Newsradio) — Barring an 11th-hour vote in Congress, American Airlines and other major carriers are prepared to furlough thousands of employees starting Thursday.

They’ve asked Congress to extend the federal Payroll Support Program, which was adopted to help businesses impacted by COVID-19. For airlines specifically, the package promised no involuntary layoffs for airline workers through the end of September.

Jim Moses, vice president of American Airlines’ Northeast hubs and gateways, said as many as 40,000 people across the country could be laid off if there’s no action by the time the payroll assistance expires Wednesday.

Nearly 1,900 people would be affected in Philadelphia.

“Pilots, flight attendants, customer service agents, customer service supervisors, customer service representatives and our mechanics, our ground service,” Moses said.

He said American Airlines management is examining all options.

“Either through an involuntary furlough, possibly being displaced to another city, or being reduced from full-time to part-time work,” he said. “So, there is a tremendous impact to this region, to this airport.”

Rob Wonderling, president and chief executive officer of the Chamber of Commerce of Greater Philadelphia, said a proposed $28 billion extension of the Payroll Support Program has bipartisan support, but it appears to be stalled.

“We view this extension as being mission-critical as part of our efforts in a public-private partnership to recharge and set in motion the recovery of the economy for the city of Philadelphia, for our citizens and the greater Philadelphia region,” he said.

Wonderling said the Philadelphia congressional delegation knows full well how important this issue is.

“This is not a to-do, this is a must-do,” Wonderling said. “Reinstating air travel with frequency, both domestic flights and abroad, is absolutely critical.”

The U.S. Treasury Department said it closed taxpayer-backed loans with seven major airlines on Tuesday: American Airlines, United Airlines, Frontier Airlines, JetBlue Airways, Alaska Airlines, SkyWest Airlines and Hawaiian Airlines.

In exchange for the loans, which will be used by the airlines to cover operating and capital expenses, the Treasury Department will receive equity warrants from each airline.

Delta Air Lines and Southwest Airlines opted to tap the private loan markets rather than take the government loans.

This aid is separate from the Payroll Support Program, which is allotted directly to pay the salaries of airline employees.

“The payroll support and loan programs created by the CARES Act have saved a large number of aviation industry jobs, and kept workers employed and connected to their healthcare, during an unprecedented time,” Treasury Secretary Steven Mnuchin said in a statement. “We are pleased to conclude loans that will support this critical industry while ensuring appropriate taxpayer compensation. We call on Congress to extend the Payroll Support Program so we can continue to support aviation industry workers as our economy reopens and we continue on the path to recovery.”