The stock market has been increasingly volatile, and even as major market benchmarks have recovered from their lows earlier this year, there are still big questions about what comes next for investors. The Nasdaq Composite (NASDAQINDEX:^COMP) isn't too far below its recent record highs. On Thursday, though, the Nasdaq was down more than 100 points right out of the gate, and the Nasdaq-100 Index also saw similar declines on a percentage basis.

Today's news that first-time claims for unemployment remained troublingly high didn't do much to inspire confidence that the economic damage caused by the COVID-19 pandemic will get fixed anytime soon. In fact, some companies are insisting that more assistance is necessary in order to prevent even more dire financial consequences. Among them are major airlines, with Nasdaq-listed American Airlines Group (NASDAQ:AAL) and United Airlines Holdings (NASDAQ:UAL) falling significantly to start Thursday's session.

The clock is ticking for airlines

American Airlines led the major carriers lower with a 5% drop in its stock Thursday morning, and United was close behind with a 4% decline. Even as the economy has started to reopen in many key states, the dramatic increase in COVID-19 case counts has brought back nagging doubts about how safe it is to fly to far-flung destinations. Airlines that are already under severe financial pressure are increasingly nervous about what that means for their hopes for a recovery in their businesses.

An aircraft with American markings sits on a runway with workers and cones nearby.

Image source: American Airlines.

For many, time is running out. American said Wednesday that it will potentially need to furlough as many as 25,000 workers starting in October if conditions don't markedly improve from here. Like most airlines, American has been working hard to get employees to accept voluntary packages like early retirement or contract buyouts. However, not enough workers have taken advantage of those packages, leaving airlines with little choice but to consider more extreme measures.

The federal aid packages that many airlines have already accepted are the only thing keeping the companies from taking action more quickly. Under the terms that the federal government set, airlines that accept federal money had to agree not to lay off workers through the end of September. With that deadline less than three months away, though, American's announcement is setting the stage for another wave of unemployment that could once again destabilize the U.S. economy.

Looking for more help

Unions representing airline employees understand the pressure that their employers are under, and that's why they've joined together to ask the federal government for more assistance. With more financial aid to airlines, union leaders hope that they can arrange to have their members remain employed through March 2021 under similar terms as the initial round of grants and loans to airlines.

American believes that the extra six months might be enough to outlast the pandemic. CEO Doug Parker expects much greater air travel demand by then, especially if efforts to accelerate development of a COVID-19 vaccine are successful.

In the meantime, though, airlines are also getting creative. On Thursday, American joined forces with JetBlue Airways (NASDAQ:JBLU) to share passengers and routes, with the idea of competing more effectively against United and Delta Air Lines (NYSE:DAL) in the Northeast. The move combines American's international reach with JetBlue's concentration in key hubs like New York City.

It's still far too early to tell whether efforts from American and its peers will be enough to survive the financial pressures from the pandemic. If air travel doesn't bounce back soon, though, there's a significant chance that airline stocks will have to resort to more aggressive measures to keep their businesses operating.