Spirit warns of layoffs; aid for contractors being examined

Spirit Airlines is warning employees that it could furlough up to 30% of its roughly 9,000 workers in October, when federal payroll-help money runs out.

CEO Ted Christie said in a memo to employees that furloughs might be needed because Spirit is burning through too much cash as the coronavirus pandemic continues to cut sharply into air travel.

Separately, key members of Congress said they are investigating aviation contractors that took federal payroll aid and then laid off thousands of workers. They urged the Treasury Department to recover any money that was given to the companies.

Airlines and airline contractors who received cash from a $32 billion pool of federal payroll aid agreed not to lay off workers until Oct. 1. Airline labor unions are lobbying Congress for six more months of federal aid.

Some contractors who received money laid off workers anyway, according to three Democrats in the U.S. House of Representatives. Reps. James Clyburn, R-S.C., Peter DeFazio, D-Ore., and Maxine Waters, D-Calif., said at least 12 contractors accepted a combined total of more than $700 million in aid after laying off nearly 9,300 workers.

The lawmakers, who chair panels involved in drafting or overseeing coronavirus relief measures, asked Treasury Secretary Steven Mnuchin on Wednesday to stop any aid to the companies and recover any money that was paid.

The biggest aid recipients of the companies they named were caterers Gate Gourmet, which expected to get $171 million but laid off 3,567 employees earlier this year according to state filings, and Swissport USA, which anticipated $170 million but had laid off 2,840 workers.

The catering companies did not immediately respond to requests for comment.

At Spirit, the pilots’ union said it was notified Wednesday that 806 pilots...