Can Airlines Avoid Pilot Layoffs With Creative Solutions?
The COVID-19 pandemic crushed U.S. air travel demand this spring, because of widespread stay-at-home orders. And while domestic travel started to rebound in May, that recovery has stalled out as COVID-19 case numbers have surged across much of the United States. In recent days, throughput volume at TSA checkpoints has averaged just 26% of year-ago levels.
Nevertheless, airline workers have kept their jobs so far, as the CARES Act provided payroll support grants to airlines in exchange for agreeing not to implement any involuntary job cuts before Oct. 1. However, with air travel demand remaining weak, airlines have started sending out WARN notices telling employees about potential furloughs and layoffs this fall.
Yet airlines have significant incentives to minimize pilot furloughs. As a result, several U.S. airlines -- including Delta Air Lines (NYSE: DAL) and United Airlines (NASDAQ: UAL) -- are trying to reach agreements with their pilot unions that would make it economically feasible to delay, mitigate, or avoid furloughs.
Source Fool.com
