New York (AFP)

Unless there is a last-minute agreement in the US Congress, airlines weakened by the coronavirus pandemic are preparing to lay off tens of thousands of people from Thursday in the United States.

The loans granted Tuesday evening by the Ministry of Finance to seven major air transport companies for a total amount of 25 billion dollars do not change the situation, assured AFP sources close to the airlines.

This money is intended to help businesses cover current expenses but not salaries.

American Airlines, Delta, United and Southwest, had pledged in the spring not to fire anyone until September 30, in exchange for subsidies also worth $ 25 billion.

But many passengers remain reluctant to fly in a confined space, international flights are still subject to strict restrictions and business travel is at half mast.

The number of customers passing through security at US airports is still down by around 60% to 70% from the same period in 2019, according to government figures.

The companies have already slashed a lot in their workforce through voluntary departure plans, early retirement and unpaid leave.

At Delta, more than 40,000 employees have already opted for one of these programs.

Southwest has separated, either temporarily or permanently, from 27% of its employees.

But this is not enough.

Government support to help pay wages expires on September 30.

American Airlines has warned that if the grant is not extended, it could lay off up to 19,000 people as of Thursday.

At United Airlines, it would be just over 13,000.

These projects have not changed, a source close to the company confirmed to AFP overnight from Tuesday to Wednesday.

The unions, who like the bosses of the sector have been pleading in Washington for several weeks for an extension of the subsidy program, estimate that the sector could lay off a total of more than 100,000 employees.

Discussions between Democrats and Republicans on a new plan to support the economy remain at an impasse for the moment.

- Threat -

The threats of massive layoffs are unlikely to be fully implemented, however tempers Peter McNally of Third Bridge.

On the one hand, the airlines have raised a lot of money in recent months to deal with the crisis and their financial situation is not as desperate as it might appear in the spring.

Some companies such as American Airlines have seized the opportunity to draw from a budget of 25 billion dollars made available to them by the government for loans.

Others like Delta or Southwest preferred not to have to meet the requirements of the State (minority stake acquisition, temporary ban on paying dividends, limit on executive compensation) and borrowed heavily from the financial markets.

Airlines must also be ready to expand their flight programs once air traffic takes off again.

From this perspective, smaller companies like JetBlue or Alaska Airlines "may be less exposed because they are less dependent on international flights and business travel" than United, American or Delta, notes Mr. McNally.

The recovery will in any case depend on the large-scale distribution of a vaccine or an effective treatment, and the return to normal in the companies.

In the meantime, "companies need to adjust their costs, and pilots, flight attendants and mechanics understand that," McNally adds.

The United pilots thus agreed on Monday, among other concessions, to reduce their schedules to avoid the technical layoff of 2,850 of them until at least June 2021.

- Public sector decimated -

Airlines are far from the only ones affected by the pandemic.

Disney, for example, announced on Tuesday the cutting of 28,000 jobs in the United States.

The casino giant MGM had indicated at the end of August having to part with 18,000 employees already technically unemployed.

Government aid has enabled businesses and individuals to keep their heads above water.

But like those allocated to the aviation sector, some aid will soon expire, underlines Nancy Vanden Houten of Oxford Economics.

The funds dedicated to unemployment benefits paid by the federal government in addition to those of the local authorities, already reduced from 600 dollars per week to 300 dollars in early August, "should dry up during the month of October", warns the economist .

State and local government finances are also hit hard by the drop in economic activity.

The think tank Economic Policy Institute estimates that, without government help, 5.3 million people could be made redundant by the end of 2021 in the public sector.

© 2020 AFP