American Airlines is cutting 19,000 jobs when federal aid expires in October

[Andy]

Key Points

• American Airlines is cutting 19,000 employees in October.
• The carrier expects its fourth-quarter capacity to be half of the year-ago levels with travel demand still down.
• Airlines have pushed for an extension of $25 billion in federal payroll aid to avoid furloughs.

Full story:

https://www.cnbc.com/2020/08/25/amer...n-october.html

[Chris]

I am not confident the “CARES 2.0” is going to happen. CARES 1.0 was based on $25b subsidy to cover *2019* payroll costs. The effort to do a clean extension of the law for 6 months thru 31Mar wants another $25b subsidy granted to save 75k jobs. $25b/75k = $333k subsidy per employee. I think it is likely there will be another round of help for the airlines, but it is increasingly unlikely that it will be a clean extension. IATA does not forecast travel to return to pre-COVID levels until 2024 - so the question on lawmaker’s minds is surely if continuing a subsidy based on pre-COVID staffing levels is wise. Time will tell.