WASHINGTON – Two airline giants said that they would cancel tens of thousands of planned layoffs because of aid earmarked for them in the $1.9 trillion stimulus measure passed by Congress this week, an early sign of job losses averted by the landmark package.
Scott Kirby, CEO of United Airlines, which had warned employees about 14,000 layoffs last month, said in a social media post that Congress’s new funding for airlines would allow the workers to receive their paychecks and health care through September.
American Airlines said it planned to rescind notices it sent last month to 13,000 employees about coming layoffs.
“Those are happily canceled – you can tear them up!” Doug Parker, American’s CEO, and Robert Isom, its president, wrote in a note to employees. “We are grateful for the support of our government leaders and their continued acknowledgment of all you do.”
The $1.9 trillion stimulus package Congress passed on Wednesday, which was signed by President Joe Biden on Thursday, delivers payments for middle- and lower-income households and expands unemployment benefits for workers. It also sets aside hundreds of billions of dollars for cities and states, school re-openings, vaccine distribution and testing and other health-care funding.
Unlike previous stimulus efforts, Biden’s relief package includes far less for companies, but it does include $65 billion that is directed to range of hurting industries including restaurants, aviation, live entertainment and tourism.
Chip Rogers, president and CEO of the American Hotel and Lodging Association, called it a vital step forward that will help small businesses and protect jobs. He said that the pandemic has wiped out 10 years of hotel industry growth, noting that leisure and hospitality accounted for about 39% of the jobs lost during the pandemic.
“We applaud President Joe Biden for recognizing that small businesses need more help to get through this difficult time,” he said in a statement. “This legislation will serve as a critical lifeline for hotels and other businesses that have been decimated by the pandemic.”
Annemarie Strassel, a spokesperson for Unite Here, a union representing 300,000 people in industries like hotels, airports, transportation and food service, said that they had not been informed about any planned layoffs being canceled as a result of the stimulus package. About 70 to 80% of union remembers remain out of work, she said.
But members will benefit from several measures in the law, including health care coverage for people who lose their coverage through work, $1,400 stimulus checks, child tax credits and unemployment insurance bonuses, said Strassel.
“The real benefit we see is the immediate and direct relief that millions of people, including hundreds of thousands of out-of-work hospitality workers, will experience as result of this law,” she said.
The bill sets aside $15 billion for airlines and airline contractors, which have struggled mightily with sagging demand for travel during the pandemic, to keep employees on the payroll through September.
Boeing, which had said it would pare its workforce down to about 130,000 jobs by the end of this year, a drop of about 30,000 positions since the beginning of 2020, declined to say whether the aid would help avert any of the layoffs, but said it was grateful for the package.
Separately, the legislation provides $3 billion in payroll support for the aerospace supply chain, which should benefit many Washington state suppliers to Boeing.
Any aerospace manufacturer that furloughed or laid off more than 10% of its workforce, or saw its revenue drop at least 15% between 2019 and 2020, is eligible for a six-month grant to help pay the wages of up to 25% of its workforce.
The government will pay 50% of employees’ total compensation, including health care benefits, with the employer responsible for the other 50%.
“This legislation will allow airlines and aerospace suppliers to keep employees on the job and ready to help drive a strong economic recovery, with travel continuing to serve as an engine of the global economy,” the company said in a statement.
The bill also provides $8 billion to U.S. airports and some $30.5 billion in grants to other transit agencies. Amtrak, which is scheduled to receive about $1.7 billion, said Wednesday that hundreds of furloughed employees could be called back to work as early as next month.
The Metropolitan Transportation Authority of New York had warned that it might have to eliminate 9,000 positions. But it is expected to receive $6 billion from the stimulus package now, which it said would help protect against layoffs and service cuts in the coming years.
The Washington Metropolitan Area Transit Authority, which is projected to receive the bulk of $1.4 billion in transit funding earmarked for the Washington, D.C., region, said that it would be able to put off the service cuts and layoffs proposed for fiscal year 2022 because of the package. It proposed cutting some 2,400 positions last year.
“Congress has once again stepped up to address the needs of Metro and the regional transit systems that will be critical to our region’s economic recovery,” Metro Board of Directors Chair Paul Smedberg said in a statement. “While it will take more time to work out all the details, including Metro’s exact share of this funding, the $1.4 billion provided by the American Recovery Plan for our region’s transit agencies will allow us to avert the painful service reductions and layoffs that were on the table.”
The bill also includes $28.6 billion in relief for restaurants.
Some small business owners say they are still not sure how they will benefit from the stimulus plan.
Susannah Koteen, the owner of Lido, an Italian restaurant in the Harlem neighborhood of New York, said she hoped to receive a grant through the stimulus program to recoup some of the money she spent creating outside seating that was safe for customers to use during the pandemic.
She has dropped her staffing from around 40 before the pandemic to about 25 to 28 now. The workers still employed also work fewer hours than they did before. The more help the restaurant receives, the more likely it is to rehire workers as pandemic restrictions ease, Koteen said.
“It’s waiting until they increase capacity, waiting until more people are comfortable,” she said. “If that happens we’ll be able to hire more people, but if we have a cushion and know we have payroll covered, will be a huge help.”
Stephen Bystran is the president of Lakewood Spirits, a craft distillery and event space in Buffalo, New York. Before the pandemic hit, the distillery, which includes a tasting room, and the event venue were doing brisk business, he said. But that all ended about a year ago.
Bystran said he’s down from about 25 employees to six, but has been kept afloat by two rounds of Paycheck Protection Program loans. The distillery pivoted to making hand sanitizer at one point last year during shortages, helping supply nursing homes, hospitals and police and fire departments in the area, Bystran said.
Because of his space’s multi-hyphenate identity — it’s a distillery that also operates as a quasi-bar that also hosts big events like weddings — each round of stimulus has set off a search through the weeds of the legislation to see which aid programs might apply to it, a complicated process for a small business without a large legion of lawyers and accountants at their disposal.
So Bystran said he’s not sure if he’ll be able to take advantage of any new programs in the current stimulus package, but said he is hopeful.
“I have not done anything preemptively because this was coming,” he said. “I have learned the devil’s in the details. … Does it apply to me? How does it apply? What are the rules, and what back flips do I have to do?”
The aid provisions have also drawn some unlikely support. Republican Sen. Roger Wicker of Mississippi voted against the legislation Wednesday but hailed the relief for restaurants it included. “This funding will ensure small businesses can survive the pandemic by helping to adapt their operations and keep their employees on the payroll,” he said on Twitter.
Other Republicans have continued to fight against it. Sen. Rick Scott of Florida on Wednesday urged cities and states to return the $350 billion in aid they are slated to receive, despite the popularity of the measure and the pleas from many local leaders, including Republicans, for the funding.
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Seattle Times aerospace reporter Dominic Gates contributed to this report. The Washington Post’s Lori Aratani, Luz Lazo, and Hamza Shaban also contributed.