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Airlines

Senators: Support for Air Carrier Aid Is Non-Existent

Senators: Support for Air Carrier Aid Is Non-Existent
Joe Cortez

The U.S. Senate plan for an economic stimulus faltered over the weekend, leaving airlines begging for any support they can receive from the government to stay afloat. A letter signed by 10 airline executives – including America’s major carriers – warns “Time is running out” as they ask for any help through an economic stimulus bill or otherwise.

Airlines warn “draconian measures” could be in the future

Many of America’s biggest carriers – Alaska Airlines, American Airlines, Delta Air Lines, Southwest Airlines and United Airlines – have an unprecedented number of airplanes grounded right now due to a lack of demand from the novel Coronavirus (COVID-19) situation. Without aircraft flying, the carriers say they can’t make money, which is why they are seeing help from the government.

Some of that help was supposed to come from a proposed economic stimulus bill considered by the U.S. Senate over the weekend. The Washington Post reports it was defeated twice on procedural votes. Included in it was a $500 billion fund to aid businesses during this crisis. Republicans argued it was necessary to keep the economy moving, while Democrats argued that it didn’t provide enough help for workers and families.

Losing out in the midst of it are the airlines, who warned their airlines could face massive labor cuts if Congress won’t act soon. After seeking an aid package worth over $50 billion, the letter from Airlines for America and signed by 10 aviation executives now asks for around $58 billion, with self-imposed limits on their corporate activity.

“Unless worker payroll protection grants are passed immediately, many of us will be forced to take draconian measures such as furloughs,” the letter warns.

What Airlines Won’t Do If They Receive Aid

“If worker payroll protection grants are enacted, equaling at least $29 billion, participating passenger and cargo air carriers will not furlough employees or conduct reductions in force through August 31, 2020,” the letter bartering for aid reads. “If loans and/or loan guarantees are enacted, equaling at least $29 billion, participating passenger and cargo air carriers commit to: Placing limits on executive compensation; eliminating stock buy backs over the life of the loans; and eliminating stock dividends for the life of the loans.

Support for Air Carrier Aid Is Non Existent

Among those on Capitol Hill, an airline bailout package was not a priority. Some Senators who spoke to journalists noted that the support for air carrier aid was non-existent.

“At this point, I don’t sense support for it here or with the administration,” Sen. John Thune (R-SD) told Reuters. “But like I said, nothing is done.”

Union leaders are equally frustrated with the idea of airlines getting massive support. New York-based labor groups are speaking out against the airlines’ requests, saying economic stimulus packages proposed to this point don’t do enough to help front-line aviation workers at airports.

“This moment calls for us to remember America’s true promise, which is that in times of trouble, in times of crisis, we pull together and support one another,” Kyle Bragg, president of SEIU Local 32BJ, representing airport workers across all three of New York’s major airports, told the New York Daily News. “As we speak thousands of airport contract workers are out of work at the three airports.”

If airlines were to get a “bailout” package, lawmakers are asking for strong restrictions to be put around it. A Vox report notes some of those could include a short-term ban on stock buybacks and limiting executive salaries and bonuses.

The airlines say they are willing to go along if it means they can get help while their aircraft sit idle on the tarmac.

View Comments (12)

12 Comments

  1. opushomes

    March 23, 2020 at 10:51 pm

    Cruise lines employ few U.S. citizens other than executives and some corporate administrative.

  2. MrBizFlyer

    March 24, 2020 at 5:47 am

    Bailouts are oversold and oversubscribed. Airlines will be put on a waitlist but there may be a change fee. Airlines should stop complaining or security will be called and they will be forcibly removed from the queue.

  3. samftla

    March 24, 2020 at 12:01 pm

    In retrospect spending 90% of their free cash on stock buybacks might have been a poor decision 😏

  4. pierre mclopez

    March 24, 2020 at 5:20 pm

    C-suite suits with entitlement attitude.

  5. bcmckay99

    March 25, 2020 at 5:21 am

    It’s a business model where most people dread using the product and feel nickel and dimed every step of the way (even to sit with your family or in a non-middle seat). That is now catching up with them. It’s unsustainable. No one is stepping up on their behalf when their very existence is threatened.

  6. Slickw

    March 25, 2020 at 5:40 am

    Give them a bailout then a week later “devalue” their interest rate the same way they devalue award charts. Here’s your bailout with a 1% interest rate. Then devalue it to 4% a week later after they’ve taken the bailout and see if they like it. After all, just as the miles we earn don’t belong to us, the bailout money doesn’t belong to them – it belongs to us the taxpayers.

  7. Podcat

    March 25, 2020 at 8:27 am

    You reap what you sow.
    Airlines have no friends anymore.

  8. nusiax

    March 25, 2020 at 8:28 am

    Let them fail. Airlines do nothing to help and support the people. Let them fail and see what rises from the failures.

  9. raymondcmastalish

    March 25, 2020 at 11:06 am

    Just cancelled a flight we were to do on United in May and was charged $150 immediately. Yet, the refund for the extras I purchased won’t be returned for up to 14 days. What a rip off and the “offer” from airlines to waive cancellation fees is just a joke. Then they cry for help from the taxpayer. Ridiculous!

  10. paperclip55

    March 25, 2020 at 12:14 pm

    I like slickw’s idea

  11. jbrene

    March 25, 2020 at 2:46 pm

    The airlines are primarily focused on making money rather than providing great service for their customers, as you can tell by the nickel and diming they do whey you fly: extra cost for carrying your bags, using a blanket, changing flights, etc. I could see providing some type of financial assistance if they would allow you to check one bag for free, and set a change fee of $50 for changing flight arrangements. These would be reasonable accommodations for using the funds we have provided to them (through the government) to help them out.

  12. arjaok

    March 26, 2020 at 10:05 am

    Senators: Support for Air Carrier Aid is non existent!

    Also Senators: “Heres $50B guys. Make sure you lay off as many employees as you can so that you have less people to divide it amongst! ;)”

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