American Airlines starting 19,000 furloughs as bailout hopes fade

By Tracy Rucinski and David Shepardson

CHICAGO/WASHINGTON (Reuters) - American Airlines <AAL.O> said it would begin furloughs of 19,000 workers on Thursday, and a large union said other carriers would follow, as hopes faded for a last-minute bailout from Washington.

American Airlines Chief Executive Doug Parker told employees in a letter seen by Reuters that he stood ready to reverse the furloughs if a deal was reached.

The carrier had more than 140,000 employees before the coronavirus pandemic. That number is expected to be below 100,000 in October, including voluntary and involuntary furloughs.

Sara Nelson, president of the Association of Flight Attendants representing 50,000 workers at companies including United Airlines <UAL.O>, said in a statement that other airlines were starting furloughs and were also ready to reverse course.

U.S. airlines have been pleading for another $25 billion in payroll support to protect jobs for a further six months once the current package, which banned furloughs, expires at midnight EDT.

The COVID-19 pandemic has upended the travel industry around the world.

Earlier, U.S. Treasury Secretary Steven Mnuchin said talks with House of Representatives Speaker Nancy Pelosi had made progress on a bipartisan aid plan, although no deal was reached and Senate Majority Leader Mitch McConnell called a $2.2 trillion coronavirus relief proposal "outlandish."

United is expected to furlough at least 12,000. It did not immediately respond to a request for comment.

Parker said Mnuchin told him that he and Pelosi were continuing to negotiate on a bipartisan COVID-19 relief package that would include an extension of aid for airlines and could reach an agreement in coming days.

"Unfortunately, there is no guarantee that any of these efforts will come to fruition," he told employees.

Nick Calio, who heads the airline trade group Airlines for America, said earlier that the industry was still pursuing all potential avenues for new assistance as time runs short.

"People keep talking, but we need results," Calio told Reuters. "We are hopeful but not confident about them reaching a deal on a larger bill."

U.S. airline shares ended flat on Wednesday.

Weeks of intense airline lobbying has won over many but not all Washington lawmakers, while drawing attention to the plight of other pandemic-hit industries as the crisis persists.

Thousands of employees have already been instructed to return their badges.

Airlines are operating about half their 2019 flying schedules and suffering a 68% decline in passenger volumes.

The impact of the coronavirus on travel may cost as many as 46 million jobs globally, according to projections published on Wednesday by Air Transport Action Group.

Airlines have argued they need trained employees to help drive an economic recovery as the pandemic subsides. American Airlines' Parker told CNN he believed one more round of aid would be sufficient.

Airline workers said they would keep pressing lawmakers until 11:59 p.m on Wednesday.

"We're not conceding this fight," said Amanda Steinbrunn, a United flight attendant who will be furloughed on Thursday if Congress does not act.

(Reporting by Tracy Rucinski and David Shepardson; Editing by Rosalba O'Brien, Peter Henderson and Peter Cooney)