Airlines ask Congress for grants to combat impact
Planes sit on the tarmac at John F. Kennedy Airport (JFK) on January 31, 2020 in New York City.
Spencer Platt | Getty Images
U.S. airlines on Saturday warned they should put workers on leave unless Congress approves a $ 58 billion aid package that includes grants, not just loans, as the industry is reeling from the impact of the coronavirus.
Senate Republicans last week proposed legislation providing $ 58 billion in aid to passenger and freight carriers, but in the form of loans that airlines would later have to repay.
“Time is running out,” CEOs of Southwest, Delta, Alaska, American, United, JetBlue, Hawaiian, UPS Airlines and FedEx, and their lobby group, Airlines for America, wrote to congressional leaders. It was one of a series of grim messages from airline and union chiefs this week about the sharp collapse in bookings caused by the coronavirus and the potential toll on workers. “Unless the wage protection subsidies for workers are passed immediately, many of us will be forced to take drastic measures such as time off.”
U.S. airlines employ nearly 750,000 people and major carriers have now reduced their international networks to the smallest for decades, cutting thousands of domestic flights, parking hundreds of planes and urging employees to take unpaid time off, in an attempt to save money as demand collapses.
Hundreds of aviation workers are already out of work. According to the Unite Here union, some 2,400 airport concession employees have been inactive, as have nearly 300 catering employees. Minneapolis-based Compass Airlines, a regional carrier with 1,300 employees, said last week it planned to shut down after its customers, Delta and American, cut flights.
Delta said on Friday it expects its second-quarter revenue to fall 80% or $ 10 billion. Some 13,000 of the company’s 91,000 or so employees have volunteered to take unpaid leave, but CEO Ed Bastian told staff more volunteers are needed.
United plans to cut 90% of international service scheduled for April and has warned it may have to lay off thousands of workers if Congress does not act quickly enough. He announced on Saturday that he would restore some flights between several European cities, Sao Paulo, Brazil, Seoul, South Korea to the United States to help displaced passengers.
Without “sufficient government support by the end of March, our company will start taking the necessary steps to reduce our payroll in line with the 60% reduction in hours we announced for April,” CEO Oscar Munoz said, airline president Scott Kirby, who takes the helm next month, and several unions told employees in a memo. “The May program will likely be further reduced. “
Airlines executives have said they will not lay off workers or cut staff until Aug. 31 if Congress approves at least $ 29 billion in “workers’ wage protection subsidies.”
The industry is also seeking at least $ 29 billion in loans and loan guarantees and has pledged to limit executive compensation, suspend stock buyback programs and dividends. Some lawmakers and President Donald Trump said this week they were in favor of banning airline share buybacks as a condition of aid.
Airline unions are also calling on Congress to act quickly on an aid package that does not include all loans.
A bailout only in the form of loans “will burden airlines with so much debt it will lead to bankruptcy and workers (who are currently on the front lines of this virus) will be hit again”, Sara Nelson, president of the Association of Flight Attendants, which represents some 50,000 cabin crew, wrote to senators on Saturday. “A real back-up plan must put workers first – always – but especially in the midst of a public health crisis. Federal aid designed for the wage bill is the only way to avoid mass layoffs. Loans don’t. will not reduce it. “