Airlines: Job Losses Will Undoubtedly Happen

Airline executives and observers say it’s inevitable – the industry could lose almost 15 percent of its employees, if not more, come the fall when carriers are able to institute job cuts and layoffs.

Right now, airlines that accepted federal government grants from the CARES Act stimulus package are prohibited from instituting terminations, layoffs, involuntary furloughs or pay cuts for employees until Sept. 30. On Oct. 1, with airlines losing billions each month – the International Air Transport Association predicts 1.5 billion fewer air travelers than last year – it could get ugly.

“Our schedule is down 90%. And we plan for it to stay at that level until we begin to see demand recover,” United Airlines President Scott Kirby told CNN. “If demand remains significantly diminished on October 1, we simply won’t be able to endure this crisis as a company without implementing some of the more difficult and painful actions. These include decisions on involuntary furloughs, further reductions in hours, as well as other actions that will have an immediate impact on our people and their livelihood.”

The U.S airline industry employs almost 750,000 workers ranging from pilots and flight attendants to gate agents, mechanics and baggage handlers, among others. Airline industry analyst Helane Becker of the financial services firm Cowen says the industry could lose up to 15 percent of those workers.

“Ultimately, we will likely see 95,000 to 105,000 jobs lost in the US airline industry,” Becker said in one of her latest analysts’ notes.

Philip Baggaley says it could be worse.

Baggaley, the chief credit analyst for airlines at Standard & Poor’s, said 20 to 30 percent of airline jobs could be eliminated through buyouts and early retirement offers in addition to job cuts.

Southwest Airlines CEO Gary Kelly said on CNN this week that the carrier is going to do “everything that we can to preserve jobs. … We have a lot of cash today, but we burned through about almost a billion dollars in the month of April as an example. So you do the math in your head and you just can’t survive that way.”

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