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Travel industry layoffs begin as Congress fails to come up with new relief package

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Chris Woodyard
USA Today

Airlines, hotels and other travel-related businesses are trying desperately to urge Congress to act on a new relief plan in the wake of mass layoffs.

The day the airline industry didn’t want to see is here: Oct. 1, when 32,000 American Airlines and United Airlines employees face furloughs after lawmakers and the White House failed to agree on a broad pandemic relief package including more federal aid for airlines.

Treasury Secretary Steven Mnuchin met with House Speaker Nancy Pelosi, D-Calif., to try to work out a deal, to no avail. A House vote was postponed Wednesday on Democrats’ $2.2 trillion coronavirus relief package, which includes another $25 billion in support for airlines, in hopes of reaching an agreement through negotiation with Republicans who oppose it.

American CEO Doug Parker said that if Washington comes up with a deal providing $25 billion for airlines “over the next few days,” the company will reverse 19,000 furloughs and recall the workers.

United said the impasse forced it to furlough 13,000 workers. United said it told leaders in the Trump administration and Congress that if payroll aid is approved in the next few days, it could undo the furloughs.

Travel industry officials, meanwhile, have been sounding the alarm.

“The clock is ticking and time is quickly running out for Congress to extend the effective and successful Payroll Support Program that has kept critical frontline airline employees on the job and off unemployment,” said Nicholas Calio, CEO of trade group Airlines for America in a statement Tuesday.

With airlines collectively losing $5 billion a month due to lack of customers in the wake of the coronavirus pandemic, he had estimated that thousands of airline-related workers could be left without jobs. Earlier this year, Congress granted airlines some $50 billion in relief, half of which went to pay worker salaries.

Airports in North America are facing more than $23 billion in losses due to the drop in air travel, says Airports Council International. “Government inaction at this time of crisis is not an option,” said Kevin Burke,CEO for North America.

The entire U.S. travel industry employed 15.8 million Americans, about one of every 10jobs, before the pandemic. But its onset wiped out 51% of them, said Roger Dow, CEO of the U.S. Travel Association, at a news conference Tuesday. And relief hasn’t come to some important travel business, such as smaller nonprofit marketing organizations beyond museums and other attractions.

The damage has been especially devastating for hotels.

The hotel industry has already lost 2 million of the 8.3 million jobs it had before the pandemic. Without relief, the number of jobs lost could rise to 3.7 million, warned William “Chip” Rogers, CEO of the American Hotel & Lodging Association. Some 38,000 of the nation’s 57,000 hotels that had been in business at the start of the year could be forced to close within six months.

Hotels are “really on the brink of collapse,” Rogers said. “We need Congress to take action before our industry is changed forever.”

Tourism-dependent cities, like scenic Savannah, have suffered. Mayor Van Johnsonsaid the city knows it will take years to recover and shake the city to its core in the meantime.

“We know that visitors will eventually return to Savannah, but we don’t know what type of Savannah they will return to,” Johnson said.

USA Today’s David Oliver and The Associated Press contributed to this report.

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