US airlines ask for ransom to save jobs 0:59
New York (CNN Business) -
Time is up for 32,000 airline employees at American and United.
American Airlines CEO Doug Parker said Wednesday night that the airline has no choice but to cut 19,000 jobs after attempts to get more federal funding failed.
United Airlines CEO Scott Kirby said the decision to cut 13,000 jobs represented "a very sad day for all of us here at United."
Earlier on Wednesday, Parker told CNN that he still hoped that the job cuts could be avoided if the airline saw signs that Congress and Treasury Secretary Steven Mnuchin could reach a deal.
Airlines desperately need people to fly.
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They were considering a multi-billion dollar stimulus package that would include $ 25 billion in aid for the nation's airlines.
But sources told CNN that a deal takes longer to gain the support it needs to pass.
"Unfortunately, there is no guarantee that any of these efforts will materialize," Parker wrote in a memo to staff.
However, both Parker and Kirby suggested they could reverse course and quickly win back employees if a deal is struck in the next few days.
"We plead with our elected leaders to compromise, reach an agreement now, and save jobs," Kirby wrote in his memo to employees.
Pandemic devastates the sector
The covid-19 pandemic has caused a drop in air traffic, which has devastated the airline industry.
American lost $ 5 billion in the first half of this year, while United lost $ 3.3 billion.
Every other airline in the industry has also lost money.
The losses are projected to continue into 2021, if not beyond.
Lawmakers agreed to give airlines $ 25 billion in direct grants earlier this year.
This, as long as they won't accept non-voluntary job cuts until the end of September.
But the probationary period for non-voluntary layoffs expires Thursday.
And while seven airlines, including American and United, are set to accept another round of loans that was also approved earlier this year, that aid does not include a ban on cutting jobs.
Even with the ban on job cuts, airlines were already taking steps to cut costs.
They offered voluntary stock purchase and early retirement packages that led to nearly 50,000 employees leaving the industry.
In addition to job losses at American and United, an additional 17,000 employees in the US airline industry have been notified that their jobs are also at risk.
Airlines