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Airlines and begin furloughing employees as Payroll Support Program expires

No-sail order for cruises also hurts that industry

MIAMI – This is a tough time to be in the airline or cruise line industry.

Airlines began furloughing more than 30,000 employees Thursday as the Payroll Support Program under the CARES Act expired.

And the cruise industry is going to have to wait at least another month before they can start sailing again.

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin met Wednesday in an 11th-hour attempt to come up with a coronavirus relief plan to extend that payroll support, but no deal was immediately struck.

“Secretary Mnuchin and I had an extensive conversation and we found areas where we are seeking further clarification. Our conversations will continue,” Pelosi said in a statement.

American Airlines CEO Doug Parker said in an email to employees that he spoke with Mnuchin and he informed him that an agreement could be reached in the coming days.

Parker said the airline would begin furloughing 19,000 employees on Thursday, but said the airline would reverse the furlough processes and recall any impacted employees if efforts to extend the PSP are successful.

“I am extremely sorry we have reached this outcome,” he wrote. “It is not what you all deserve. It is a privilege to advocate on behalf of the hardworking aviation professionals at American and throughout the industry, and you have my assurance that we will continue to do so in the days ahead. Please keep contacting your elected officials about the importance of reaching an agreement that will extend PSP. We are not done fighting.”

United Airlines, meanwhile, told employees they would begin furloughing about 13,000 employees.

They too will reverse course if an agreement to extend the PSP is made.

“In a continuing effort to give the federal government every opportunity to act, we have made clear to leadership in the Administration, Congress and among our union partners that we can and will reverse the furlough process if the CARES Act Payroll Support Program is extended in the next few days,” an email from the airline stated. “We implore our elected leaders to reach a compromise, get a deal done now and save jobs.”

Aviation expert Ben Mutzabaugh says that because demand for flights is so low right now, without an extension to the Payroll Support Program, airlines just can’t afford to pay their full staffs.

“Some on Wall Street have called this ‘Terrible Thursday,’” Mutzabaugh said. “Now they’re 40% of their normal flights with 100% of the people and needless to say you spread those people over fewer than half the flights and it creates a surplus.”

Meanwhile, on the water, cruise lines have been dealt another blow, after the Centers for Disease Control extended their no-sail order through Oct. 31, effectively shutting down U.S. waters to boats capable of carrying more than 250 passengers.

That decision came in spite of new mandatory health protocol changes from the trade organization that represents more than 95% of the global cruise industry, including testing all passengers and crew, mandatory mask-wearing and more.

In response to the no-sail order extension, Carnival Cruise Line announced they are canceling all cruises for October and November from U.S. homeports except here in Miami and at Port Canaveral in Central Florida.


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