American, United to bring back 32,000 furloughed employees if COVID package is signed, sealed, delivered

The package currently awaits President Trump's signature

United and American Airlines have both announced they intend to recall some 32,000 furloughed employees following passage of a $900 billion COVID-19 relief package by Congress which includes an extension of the Payroll Support Program.

As part of the new package, the airline industry will receive $15 billion for passenger air carriers and $1 billion for contractors to be exclusively used for employee wages, salaries, and benefits. In order to be eligible, airlines must agree to avoid furloughs or pay and benefit reductions until March 31. Airlines are also required to recall employees involuntarily furloughed between Oct. 1 and the date the airlines agree to the bill's rules.

The package currently awaits the signature of approval from President Trump.

UNITED AIRLINES WILL 'EXTRACT' SICK, OR POSSIBLY SICK CREW MEMBERS FROM ABROAD USING PASSENGER-LESS PLANES

United CEO Scott Kirby and President Brett Hart said in a memo to employees Monday evening that the airline "intends to offer temporary employment" to more than 13,000 employees who were furloughed in October.

"As you know, involuntary furloughs were always a last resort for us and we worked really hard over the summer – through cost-cutting, capital-raising, and partnering with our unions – to make the number of people who were ultimately impacted as small as possible," Kirby and Hart wrote. "Now, those employees who are eligible under the terms of the PSP extension can temporarily come back to United through March 2021. This is certainly good news for our economy, our industry, and our airline - but it's especially good news for those who have been without a paycheck, and we can't wait to welcome them back."

TickerSecurityLastChangeChange %
UALUNITED AIRLINES HLDG.51.78-3.18-5.79%
AALAMERICAN AIRLINES GROUP INC.20.86-0.96-4.40%

American Airlines' announcement came less than 24 hours later, with CEO Doug Parker and President Robert Isom writing in a memo to employees Tuesday that the airline will begin recalling its nearly 19,000 furloughed employees in phases. Once officially approved, all furloughed team members will have pay and benefits restored retroactively to Dec. 1.

"If passed into law quickly, we should be able to get everyone a paycheck on Christmas Eve," Parker said in a video message.

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The relief for the airline industry comes as distribution of vaccines by Pfizer and BioNTech and Moderna to the public have begun after both were greenlit by the Food and Drug Administration earlier this month.

TickerSecurityLastChangeChange %
PFEPFIZER INC.33.80+0.03+0.09%
BNTXBIONTECH SE112.33-1.84-1.61%
MRNAMODERNA INC.148.38+3.59+2.48%

However, United airline executives warned that they do not expect customer demand to change much between now and the end of the first quarter of 2021, due to the fact that vaccinating the majority of the American public will still take months.

"United has been realistic about our outlook throughout the crisis, and we've tried to give you an honest assessment every step of the way," Kirby and Hart said. "The truth is, 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."

The Transporation Security Administration reported more than 954,000 Americans traveled on Monday, well below the more than 2.4 million travelers during the same day a year ago. According to the latest update by Johns Hopkins University, the United States has surpassed 18.1 million confirmed coronavirus cases and more than 321,000 Americans have died due to COVID-19.

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