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How airline layoffs adversely affect the economy and other jobs

Opinion

The results of massive airline job layoffs set the stage for a snow-balling effect that will affect a huge amount of other jobs, which in turn contributes to a further downturn of the economy.

On October 1, 2020, unless the U.S. Government agrees on further coronavirus government aid for the airlines, the beginning of 250,000 airline job furloughs and layoffs begin. Airlines can only survive if they cut costs.

There are about 700,000 people working for airlines in the U.S. Cutting 250,000 jobs, starting October 1, means more than 35% of the entire U.S. airline job force will eventually be without a paycheck.

This news report discusses how the US airline industry is suffering amid the COVID-19 crisis. YouTube/AlJazeera.

Airline layoffs affect the economy

And here’s the shocker:

For every 300 airline jobs lost, an additional 100 non-airline jobs are lost as a result!

So, if 250,000 airline employees are out of a job, then an additional 83,000 non-airline employees will be out of a job too.

What are the non-airline jobs depending on the airlines?

The effects of airline furloughs and layoffs will extend into airline-supported industries such as airport food workers, airport workers, hotels, and airline suppliers. The ripple-effect will create great economic harm. This, in turn, will affect every person’s ability to travel, since fewer flights and fewer people reduces capacity.

Industry rebound

Most industry experts, including United’s CEO Scott Kirby, have repeatedly said that the key to an industry rebound requires an effective vaccine to be in place.

But, don’t expect a vaccine to cause the airline industry to bounce back overnight. Vaccination programs for entire populations take a long time to complete!

Long-term effects of massive layoffs

Quick recovery of the airline industry becomes increasingly difficult for every furlough and layoff being implemented.

Airlines are unable to increase capacity on short notice

Airline jobs have complicated Federal requirements that don’t apply to non-aviation jobs.

Airline employees and airline-related job positions have strict vetting-requirements of employees:

  • Extensive background checks.
  • Security training.
  • Drug and alcohol testing, including marijuana testing.
  • Retraining requirements of many employment specialties, such as for pilots, flight attendants, mechanics, ground handling, customer service, and more.

Retraining can take months, plus it involves a very expensive undertaking for the airlines.

Airlines cannot increase capacity on short notice, because personnel cannot return to active duty until all the retraining requirements are met!

The current status of airlines

The airline industry must be in a position to serve the public on the shortest possible notice once the crisis is over.

The only way that is possible is by keeping its employees current and working. If so, the industry and its personnel will be ready to quickly resume once the crisis rebounds.

Even with most of the airplane fleets parked, awaiting the crisis-recovery the airlines are burning through millions of dollars in cash every day.

The coronavirus crisis is already witnessing people not being able to eat, inability to pay rent or mortgage, and loss of healthcare. Every aspect of society, airlines included, are being sucked into the same vicious process.

There are serious concerns about airlines liquidating, jobs lost forever, and reductions in service. And, how about the regional airline services to many parts of the country (the lifeline to many U.S. communities) disappearing?

Patience

The longer the crisis lasts the greater the chance of the airline industry, an important part of the U.S. infrastructure, falling into a deep hole so dark it could take many years to see the light again.

The U.S. government needs to keep its infrastructure intact and alive. It’s crucial to our national interest.

Don’t allow airline layoffs to affect the economy

So how do we best salvage the industry, at least implement measures that perhaps buy us enough time to best assure the quickest rebound of the airline industry possible?

It’s extremely important that the U.S. Government provides an extension of the CARES Act now!

Airline unions are pushing hard for an extension of the CARES Act for another six months until March of 2021. The reasoning behind the timeframe is:

The virus crisis would be experiencing a turn for the better, perhaps with a vaccine in place, ready to take on the normally busy summer travel season.

There is bipartisan support for an extension of the airline aid, but no action as of today. We could see results if the politicians would stop bickering over the terms of the extension.

Let’s get it done before it’s too late!

What’s your opinion on how airline layoffs affect the economy in general? You can contact us here.

Featured Image: Unsplash.

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