Disney + Airlines = 60,000 Layoffs

American Airlines Group Inc. (NASDAQ: AAL) and United Airlines Holdings Inc. (NYSE: UAL) will cut 32,000 jobs between them as travel revenue continues its flat spiral. Add this to the 28,000 that Walt Disney Co. (NYSE: DIS) said it would cut earlier this week, and just these three will slice 60,000. Without government support of the carriers, these announcements are only the start of actions that could swell to the loss of 100,000 jobs.

Both airlines said they would reinstate the workers if a government aid package that is between $20 billion and $25 billion is put into place. For now, that is a big if, because the plan needs to make it through the House of Representatives, the Senate and the White House. All three have reasons to preserve jobs in a suffering industry. Yet, its financial needs compete with other packages to boost jobs and keep businesses open.

Regardless of the aid, the return of passengers has been extremely modest. It will be undermined by a new surge in COVID-19 cases brought on by the winter and by careless behavior in some areas. Airlines could find their revenue moving back toward zero.

Delta, JetBlue, Southwest and other large U.S. carriers have not made announcements similar to those of United and American. Among them, they will need to cut tens of thousands of workers as well. Each is in a situation almost exactly like the others.

Incidentally, the effect on the hotel industry will be similar. Big hotel chains are among the largest employers in America. Both business travelers and leisure travelers will not book hotels in great numbers in the next several months. The chains and individual hotels will face the cash preservation hurdle.

While Disney theme parks have the largest attendance in the industry, several other companies are just behind it. That includes Universal, SeaWorld, Busch Gardens, Cedar Point and Six Flags. Among them, they have hundreds of thousands of workers. Many of those jobs are at extreme risk.

There is a great deal of debate about the jobs recovery. Will unemployment rates continue to fall in America as people who find work outnumber those who lose jobs? Over the course of the recovery, which lasted a decade, in a good month, the United States added 150,000 jobs. The travel and entertainment industry could upend the recovery. The process has begun already and is certain to spread.

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