US aviation sector cuts more jobs amid travel crisis

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WASHINGTON (Reuters) – The current US travel crisis is causing thousands of job losses as the aviation industry waits for passengers to return to the sky but is preparing for years of declining demand due to the coronavirus pandemic.

FILE PHOTO: Flight attendants photograph a plane landing at Reagan National Airport during the coronavirus crisis during a layover in Washington, United States, April 29, 2020. REUTERS / Kevin Lamarque / File Photo

US airlines are cutting hundreds of thousands of flights, cutting schedules by 80% or more until at least June and parking thousands of planes, as demand for tickets has dropped by about 95%. Airlines are demanding face coverings and implementing new cleaning procedures to try to convince passengers that it is safe to fly again, but also fear that the weak economy will further depress demand.

Friday evening, Spirit AeroSystems (SPR.N) said that in response to lower Boeing Co production rates (TO PROHIBIT) and Airbus SE (AIR.PA), it would fire 1,450 workers in Kansas.

“This sudden drop in air travel has forced our customers to adapt to the drop in demand from airlines, many of which are looking to postpone or cancel aircraft orders,” said Spirit AeroSystems CEO Tom Kind, to employees in an email seen by Reuters. “All indications are currently that this decline in demand for new commercial aircraft is likely to last for several years. “

Wednesday, Boeing Co (TO PROHIBIT) announced that it would cut production rates and cut around 16,000 jobs worldwide, or 10% of its workforce by the end of the year.

Boeing CEO Dave Calhoun said he expects “travel will take two to three years to return to 2019 levels and it will take a few years beyond that for the industry returns to long-term growth trends. ” The cuts in some areas, such as commercial aircraft, will be more than 15%, said Boeing.

Delta Air Lines Inc (DAL.N) said last week that he does not expect air travel to recover for two or three years. Over 37,000 Delta employees have volunteered to take one month to one year unpaid leave.

American Airlines (AAL.OCEO Doug Parker told Reuters in an interview on Thursday that the airline would be “smaller than we expected in 2021”.

The SEIU union said on Thursday that at least 13,000 union members at airports have been dismissed and that 1,000 more are expected to be terminated. The US Treasury has yet to provide $ 3 billion in congressionally approved payroll assistance grants to airport contractors such as baggage handlers and aircraft processors.

Last month, American airlines collectively received $ 25 billion in cash subsidies from the Treasury, but must not, as a condition, fire workers or cut workers until September 30.

Many airlines have warned that without a dramatic shift in passenger numbers, they will be forced to make further major cuts before the end of the year.

JPMorgan Chase said in a research note on Friday that “October 1 is likely to become one of the darkest days in the history of aerial work” – although he noted that Congress could opt for assistance additional.

United Airlines (UAL.O) cut working hours by 25% for 15,000 employees as of May 24, drawing criticism from an employee union and some American lawmakers who argue that this decision violates the terms of payroll assistance by 5 billion dollars that United receives from the Treasury.

“The taxpayers of this country have offered a generous bailout for your business and you, in turn, should honor that trust by keeping the promises you made to those you employ,” Republican Senator Josh Hawley United wrote on Friday.

United declined to comment on Hawley’s letter on Saturday, but its director of operations, Greg Hart, told employees Friday that the reduction in hours did not violate the terms of government assistance.

He said United “is making similar changes to our management staff” and that these changes will be announced on Monday.

Last month, General Electric Co (GE.N) said it was leaving 50% of workers at US engine assembly and component factories on leave, a decision that affected thousands of workers. This follows 2,600 job cuts in the United States announced in March by GE’s aviation unit, which manufactures engines for Boeing and Airbus.

David Shepardson report; Additional reporting by Tracy Rucinski; Editing by Daniel Wallis

Our standards:Principles of the Thomson Reuters Trust.

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