COVID Relief Bill Allows Airlines to Roll Back Layoff Notices

New round of stimulus funds allows airlines to bring back employees.

The $900 billion stimulus package officially known as the Consolidated Appropriation Act of 2021 was signed into law on Monday, December 21, and includes a second round of CARES Act Paycheck Protection Program (PPP) relief for commercial air carriers and contractors with additional CARES Act Payroll Support Program (PSP) funding. The additional stimulus funds will allow US passenger and cargo airlines to hire back thousands of employees that were laid off or furloughed following a significant decrease of flights and revenues caused by the ongoing COVID-19 pandemic.

Additionally, the bill will provide $284 billion in forgivable loans under the PPP for small businesses, which include numerous aviation-related companies such as charter operators, FBOs, MRO and completions facilities, and other smaller businesses that provide essential support to both the commercial and general aviation industries.

The National Air Transportation Association’s president and CEO Timothy Obitts explained that contractors to the airlines were left out of initial drafts of the bill, but because of NATA’s efforts, they were included in the final draft. “NATA worked hard and was successful in getting Part 135 certificated passenger charter operators and FBOs that provide ground handling services to commercial airlines included in the stimulus package,” Obitts said. “The majority of aviation businesses in the United States are small businesses and support 1.2 million jobs and $247 billion in annual economic activity. This bipartisan stimulus package will help many aviation businesses retain their employees during this uncertain time.”

Several airlines have issued messages to their employees and the media stating how the PSP funds will allow them to bring back personnel who were previously released from duty. In a message from United Airlines CEO J. Scott Kirby and United president Brett Hart to all employees, the company said of the new PSP relief, “United intends to offer temporary employment to thousands of our team members who were impacted on September 30. As you know, involuntary furloughs were always a last resort for us and we worked really hard over the summer—through cost-cutting, capital-raising, and partnering with our unions—to make the number of people who were ultimately impacted as small as possible. Now, those employees who are eligible under the terms of the PSP extension can temporarily come back to United through March 2021. This is certainly good news for our economy, our industry, and our airline—but it’s especially good news for those who have been without a paycheck, and we can’t wait to welcome them back.”

United Airlines
United Airlines employees eligible under the PSP extension can now come back to work through March 2021. United Airlines

Southwest Airlines CEO Gary Kelly updated employees on the COVID Relief Package by saying “I’m sure many of you have already heard the exciting news that the COVID-19 economic relief package—which includes an extension of the Payroll Support Program, or PSP—has been signed into law. The new law will provide payroll support for all Southwest employees through March 31, 2021. Given this, we currently do not anticipate the need to conduct any furloughs or pay cuts next year.” Kelly and Southwest also added special thanks to his employee message for the efforts of Senator Roger Wicker (R-MS) and Congressman Peter DeFazio (D-OR), two leaders who “have been effective advocates in making sure the US airline industry and its people did not permanently downsize due to the worldwide COVID-19 pandemic. Without those two men, there is no PSP. With this communication, we are halting all efforts to furlough or reduce employees’ pay, and officially rescinding the WARN notices, furlough notices, notices of potential impact, and notices of pay reduction for non-contract employees that were previously sent,” Kelly said.

In a statement from American Airlines CEO Doug Parker, and president Robert Isom, the company thanked Congress and the administration for the bipartisan coronavirus relief package that extends the PSP. “Our team members are the very essence of our airline. Without them, there is no American Airlines. We’re grateful that our elected officials heard us and passed a bill that includes an extension of the PSP, an important indication that our nation’s leaders believe in our team as much as we do. This PSP extension will enable us to bring furloughed team members back to work and resume air service to cities and towns that rely on us—all at a critical moment. We are sincerely grateful to a long roster of members of Congress from both sides of the aisle who understood the significance of extending the PSP. Their commitment to the livelihoods of airline workers is evident in the months of work it took to deliver this much-needed relief, and we thank them for their dedication to this effort.”

NATA expressed disappointment that general aviation airports only received $45 million in additional relief in the bill. “These airports have been a lynchpin in our nation’s response to the coronavirus and a critical part of the recovery of the national air space system. Further, these airports will play a critical role in ensuring that the COVID-19 vaccines reach rural America and communities not served by commercial aviation airports. These are the airports that help keep aviation moving, and we have to do everything we can to support them,” NATA said.

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