Airlines face worst crisis since 9/11 as funding ends

For Jennie Ballesteros, having the wings of a United Airlines flight attendant ceremonially pinned to her chest was the fulfillment of a dream she’d held onto for years - ever since some crew members she served as a waitress told her she might have what it takes.

“I’m going to make it,” Ballesteros recalls thinking. “I’m going to have some security. A retirement. A 401(k). This is an amazing job. I was just so happy.”

It was Jan. 2.

"I said, ’2020 is going to be my year.' "

Soon, news of a novel coronavirus from Wuhan, China, began spreading. In her first few months on the job, the 29-year-old was working evacuation flights as people sought to get to their home countries as the world locked down.

Now she’s on the verge of seeing her long-held dream end, facing being furloughed as one of 16,300 United employees - and more than 35,000 across the airline industry - set to be out of a job come Thursday. It’s another devastating blow for an industry facing a crisis analysts say is already far worse than it experienced after the Sept. 11, 2001, terrorist attacks, and one that has already seen employment in air transportation decline by 100,000 jobs according to one measure.

The employees facing furlough will be victims of the ongoing devastation the pandemic has inflicted on airlines, which have seen demand for travel drop precipitously since March, but also of a Congress that says it wants to protect their jobs with billions of dollars in aid and yet has been unable to reach agreement on a bill to do so.

“I feel kind of abandoned by our representatives,” said Ballesteros, who is based in San Francisco.

Leaders of her union, the Association of Flight Attendants, along with other labor groups and airline heads were in Washington last week to make a final push for an extension of financial aid known as the Payroll Support Program. At a news conference in the shadow of the Capitol on Tuesday afternoon, their frustration was clear.

“What Congress and the administration did back in March was a remarkable effort to save the U.S. economy and to save aviation,” United Airlines Chief Executive Scott Kirby said. His airline, which employs 79,000 people, received $5 billion in the first coronavirus relief package.

“But this is taking longer than most people expected six months ago and the reality is we need to do more to keep those professionals and to keep their support of the economy intact.”

Lawmakers say they didn’t intend to create a precipice when they gave airlines an initial $25 billion in aid on the condition that they not lay off workers until October. Like many Americans, they expected the virus to be under control by now. Instead, it continues to spread and air travel is stuck at about 700,000 passengers a day, a third of its normal rate.

The prospects of a deal remain uncertain, with Democrats and Republicans still haggling over a broader relief package, of which help for the airlines would likely have to be a part.

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Airline employees are far from the only workers suffering as the pandemic continues to wreak havoc on the U.S. economy. But their situation is particularly dramatic because the industry is concentrated in a few very large and very visible companies, and there is a bright deadline on the calendar. Airline industry employees may not come to mind when many Americans think of “essential workers.” But airline employees say they have risked their own health to keep planes in the air during the pandemic, transporting those who had to travel and moving essential goods, including medical supplies. Some 45 to 50 percent of freight typically moves in passenger jets.

The more than 35,000 facing furlough are only part of the industry’s story. Tens of thousands more have already taken unpaid leave, or left their airlines for good. Others have seen hours cut and worry about pay cuts this fall.

More than 1,800 U.S.airline planes remain parked - a third of the industry’s fleet - and cuts to service are likely to follow the job losses.

Though the aviation industry took a hit from 9/11, a different coronavirus outbreak in 2003 and a deep recession in 2008, economists say those episodes - while painful - pale in comparison to this year’s calamity.

Labor Department figures released this month show there are more than 100,000 fewer air transportation jobs in the U.S. than in March, a decline of more than 20 percent.

“This is just unprecedented,” said Joseph Sobieralski, an airline labor expert at Purdue University.

That overall figure goes beyond airlines to cover both passenger air travel and cargo-related employment, and doesn’t include many support jobs and the layoffs put on hold by the federal bailout. But the number is a good stand-in for gauging the severity of the downturn, Sobieralski said.

The uncertainty of life in pandemic-stricken America has made for a historic crisis for airlines and their employees.

“The 9/11 situation was abrupt. It was shocking. It knocked people back on their heels. This situation seems to be a little bit more sinister, simply because we don’t know,” said Eric Jones, chair of the maintenance science department at Embry-Riddle Aeronautical University and a former mechanic for Southwest Airlines. “There’s a sense of unknowing about, well, when is covid going to recede? When is this vaccine going to happen?”

Furloughed employees will have the right to be called back to their old jobs, but industry leaders and analysts expect the recovery to take years.

The Trump administration has faced sharp criticism for downplaying and mismanaging the pandemic, and for failing to put in place a national testing infrastructure and other measures that could slow the virus’s spread and give airline passengers and others the confidence to resume a more normal life.

Daniel Elwell, deputy administrator at the Federal Aviation Administration, recently told state aviation leaders that the government is consulting with airlines and international officials on plans to “incentivize travel while keeping passengers safe and healthy,” and said details would be forthcoming. The goal, Elwell told the National Association of State Aviation Officials, is not “to create zero risk or to eliminate any chance of covid,” but rather to “bring the highest level of health security into the system without making it so burdensome that we can’t fly.”

Individual airlines have adopted different strategies in response to the crisis. United and American Airlines began warning of mass furloughs in the summer. But Delta Air Lines has been able to avoid doing so, instead using the summer to convince 40,000 of the 90,000 people it employed in March to go on temporary unpaid leave and another 17,000 to accept separation packages. The company received $5.4 billion from the payroll support program.

Delta’s leaders have praised employees' willingness to make sacrifices for the good of the company, but two flight attendants interviewed described receiving a barrage of emails that left them feeling intensely pressured to leave.

“I definitely feel like that was implied, you’re a bad employee if you don’t take the leave,” said one of the flight attendants, who spoke on the condition of anonymity because she feared retaliation and like nearly all Delta employees, is not protected by a union.

Delta, in a statement, said the decision about whether to take a leave, “was left up to each individual Delta employee to make on behalf of themselves and their families.”

“Delta people have done everything to step up during this pandemic which is completely a function of our unique culture and why there will be no involuntary furloughs for Delta front-line ground and flight attendants in the U.S.,” the company said.

United and American, which are heavily unionized, kept most employees on their payrolls, and the two airlines account for nearly all of the coming job losses. American, which accepted $5.8 billion in payroll support, is preparing to furlough 19,000 of its 107,000 employees. Chief Executive Doug Parker said that with his company burning through $1 billion a month, he has no choice but to move forward.

“As painful as it is that is absolutely what we would have to do,” Parker said in a phone interview from the airline’s Washington office, where he spent the week pursuing the campaign for more federal assistance.

Should the money come through, Parker and Kirby both said they expect demand for travel to be robust enough in six months that the industry will be ready to start standing on its own again.

However, Parker said if workers are furloughed, the airline won’t be able to quickly rehire enough people to match that demand because they will require months of retraining, something he said could hamper a broader economic recovery.

“It would be a really bad thing for American Airlines and it would be a really bad thing for our country,” he said.

Southwest, which also is largely unionized, is trying to avoid that situation, agreeing to pay thousands of its employees not to come to work - for up to five years in the case of pilots - or to retire early.

The carrier, which employs 62,000, received $3.3 billion from the payroll program. Southwest has also raised more than $15 billion by borrowing, selling assets and leasing them back and issuing new stock.

With its “Extended Emergency Time Off” program, the company is trying to stop hemorrhaging money on salaries, but still maintain ties with employees it has already spent large sums training and hopes it will eventually need again.

The volunteers keep a significant chunk of their wages and all their benefits. About 12,500 employees are participating. Pilots were offered about half of their pay, a Southwest pilot said in an interview, though the company declined to provide specific compensation figures. The company can call the pilots back to work with a minimum of 30 days notice, but said it would try volunteers first “if additional pilots are ever needed.”

More than 4,200 flight attendants, mechanics, pilots, and customer service and ground crew workers have agreed to leave Southwest altogether, the airline said in a regulatory filing. Employees said the departures were sweetened with generous incentive packages.

Avoiding layoffs is a point of pride at Southwest, something the company boasts it has never had to do in its 49-year history. Chief Executive Gary Kelly said Southwest is not planning pay cuts or involuntary furloughs this year either, though “we will continue to plan for multiple weak scenarios and maintain our preparedness.”

While avoiding the pain of layoffs, the thousands of early retirements and departures have made for a tumultuous, and at times emotional, stretch at the airline.

“The great thing is, you’re getting rid of your top earners,” said the Southwest pilot, who spoke on the condition of anonymity because employees are not authorized to speak to media. “It helps all of us.”

But the idea of cutting short their careers and time in the cockpit was a struggle for many, the pilot said.

“A lot of these guys just love it. They love what they do,” the pilot said. “But the package was so good it really made people think. There are a lot of people who wish they were in a position to take it, myself included.”

Some lawmakers have questioned the airlines' efforts to cut labor costs while accepting billions in federal aid meant to shore up their payrolls. Rules for the payroll grant program, part of the massive aid package known as the Cares Act, said airlines could not involuntarily put people out of work or cut pay if they accepted the money, but some airlines interpreted the language to mean that cutting work hours was allowed.

Delta cut hours by 25% for many employees, a policy Delta Chief Executive Ed Bastian said would continue through the end of the year. United sought to force a cut in some 15,000 employees' hours, but backed off under pressure from political leaders and a lawsuit by one of its unions. Several airline contractors are under investigation by House Democrats, accused of laying off workers immediately before receiving the payroll aid money.

Nonetheless, there is broad bipartisan support for renewing the program through April, even among those like Rep. Jan Schakowsky, D-Ill., who questioned why the Treasury Department allowed companies receiving aid to cut hours. She said she hopes “that it can be reauthorized quickly” and that new safeguards could be included in an extension.

The problem has remained finding a route for turning that support into legislation.

Early last week, Sens. Roger Wicker, R-Miss., and Susan Collins, R-Maine, who lead committees with responsibility for aviation, introduced a stand-alone bill to extend the payroll protection program. About two dozen other Senators have signed on as co-sponsors of the legislation, including two Democrats.

White House press secretary Kayleigh McEnany said the Trump administration wanted lawmakers to pass one-off aid bills, including help for the airlines.

But Democratic leaders in the House have been committed to passing several trillion dollars in aid as a single package. Rep. Rick Larsen, D-Wash., who chairs the aviation subcommittee, said he could not foresee a stand-alone bill being successful when there are also local government workers whose jobs are on the line and people are on the verge of being evicted.

“All these folks and more need to have their needs reflected in a covid-19 relief package,” Larsen said.

On Thursday, House Speaker Nancy Pelosi, D-Calif., said she would begin crafting a new proposal that would include help for the airlines and took steps to open negotiations with the Trump administration.

For front-line airline workers counting down the days to Oct. 1, the regular struggles of life were magnified to huge proportions by the virus and the impending loss of their livelihoods.

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In March, when President Donald Trump signed the Cares Act, Toni Valentine felt like she finally had time to breathe.

The payroll protection program included in the law offered her assurance she could keep her job as a reservations agent at United, she said, and gave her family stability at a time when so much else in their world was uncertain.

For Valentine, 2019 had been a difficult year: Six months after starting a new job, her husband suffered a massive stroke.

“We lost a whole income, medical benefits,” she said. “It just seemed like it happened overnight.”

These days, Valentine, 41, who has worked at United for 15 years, finds herself anxious and worried. Worried about supporting six kids. Worried about bills - phone, electricity and gas. Worried about what she’ll do if she’s furloughed and loses her medical coverage in the midst of a pandemic.

Her family is doing what they can. Her 19-year-old son left college to help her manage, caring for his younger siblings and overseeing their online schooling. She’s thankful for that and other small things. Her voice quivered as she recalled how quietly relieved she was that school would be online and not in person: There wasn’t any extra money for new school supplies and clothes this year.

And so she prays. And works. And prays. And works. And every day she said it gets just a bit harder.

“I have to put on this brave face and be the best employee I’ve got to be knowing that . . . I might not have a job,” said Valentine, who lives in the Detroit suburbs. “And that’s the hardest thing ever.”

Andrea' Myers has spent the last few months in a fog of worry. Myers, also a United reservations agent, was diagnosed with cancer in February and had surgery to remove a tumor in March, just as the pandemic was beginning to shut down cities across the country.

Since the hospital only allowed one person to be with her due to coronavirus restrictions, three carloads of relatives sat in the hospital parking lot for nine hours as she underwent surgery. While she was in the hospital recovering, she got covid-19.

But Myers returned to work in July, relieved to still have a job. Then came word of possible furloughs. Now just days from the deadline, she’s grappling with the idea she may have to leave the company she’s been with for 21 years, losing her health insurance. Her husband was laid off from his job as an electrician, and so was her son, who worked for Hertz.

“We just need to make sure that people understand that we’re people,” said Myers, 46, who also lives in Detroit. “We’re not just a number at United Airlines. We have families. We have things we have to get done.”

For Ballesteros, the elation of becoming a flight attendant began to give way to dread as the virus took hold.

In March, she flew on a packed 787 to Munich, returning German residents home from the U.S. At first she was excited to be going to Europe, only to realize she couldn’t leave her hotel. And when she was in the van on the way to the hotel, she learned her foster father had had a heart attack.

He’d already been undergoing chemotherapy, and Ballesteros said she had avoided visiting him so as to not potentially expose him to the coronavirus.He died just as she was getting back from Munich.

“I still haven’t gone home,” she said. “I haven’t been able to hug my foster mom.”

If there’s no aid deal, Ballesteros said she doesn’t know what she’ll do. At one point it looked like she’d lined up a bartending job at a new restaurant, but because of the pandemic, it’s not going to open. Unemployment will barely cover her rent and car payment. She spent her savings to break a lease in Las Vegas and move to San Francisco for the new job.

“I’m at the absolute bottom,” she said.

She plans to keep working this week. Then she might have to turn in her company property. But, Ballesteros said, she would keep the wings.