American Airlines Should Spend Government Payroll Subsidies On.. Payroll

American Airlines is bringing 11 pilots back to work after furlough. They’ll start requalification training on March 2, 2021. All of them have received a WARN Act notice, letting them know they may be re-furloughed at the start of April.

  • Four of the pilots will fly Airbus narrowbodies and 7 will be first officers on Boeing 737s.
  • Three are based at New York LaGuardia; two each at Washington National, Dallas-Fort Worth, and Los Angeles; and one each at Boston; Philadelphia and Phoenix.

All of American’s furloughed pilots and other employees have been getting paid under the second round of Payroll Support Program subsidies from the federal government. Pay started at the end of December, retroactive to December 1.

Congress required them to be paid through March 31 but there was no rule that said they had to work. Airlines claimed if they weren’t flying the economy could collapse and vaccines wouldn’t be transported. None of that was true. These 11 will go into training, but other furloughed pilots may not train at all before the airline is free to let them go again.

American reports that paying previously furloughed workers costs them $100 million a month for four months, so they’re spending less than 15% of Payroll Support Program 2 subsidies on employees who had been furloughed. The airline keeps the other 85% for themselves (using it to cover costs they would have incurred anyway).

Since it was so important to the airline and country to get these pilots flying that it drove a second round of subsidies, you’d think American might be willing to spend even a little more of the subsidy money they were given by the federal government actually paying pilots rather than letting the go again? (Just in case you think ‘no private business would spend more than they’re legally required to’ bear in mind that Southwest committed not to furlough anyone through the end of 2021 once they received the second bailout, and Delta hasn’t furloughed anyone either.)

One thing that’s boosted how much money American Airlines keeps for itself is voluntary leaves. They’ve convinced employees to go on unpaid leaves. Many thought they would collect unemployment, understanding that American would not contest these claims.

Now they are stuck – no pay while states clamor for repayment of unemployment – but American keeps the money government gave that these employees would have been entitled to if they hadn’t been enticed to take voluntary leaves. American isn’t paying them out of payroll support funds because they left voluntarily, and of course one argument for PSP was that it would save on unemployment.

he airline really should make good on this, since if they hadn’t enticed people into these leaves they’d have had to pay them using PSP funds anyway! And unlike Southwest they’re not going to commit to keeping employees on past April thanks to the second government bailout – instead they are holding out for bailout number three!

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Sure this is outrageous. But so is all the other bullshit being funded in these relief bills, that have nothing to do with COVID. Until American citizens demand better from our elected officials, they will be more than happy to keep spending our money in this fashion.

  2. Like Parker could care less about screwing over anyone or any group. The guy is just way out of his depth running a large airline.

  3. Again you’ve conflated the truth with gossip.

    EVERYONE was recalled. FT AND PT getting paid. No one was back in uniform for at least a month or more until they could organize the recall back to actual work. You just can’t say come to work at an airlines with a severely reduced schedule. Takes a little time.
    Then AA started paying everyone Christmas Eve, before the joke of a government voted on the bill backdated to Dec 1st with health insurance reactivated which no other airline did.

    I hope corporate security finds your mole who is feeding you BS most of the time.

    Your bias against AA is as deplorable as you are.

  4. So glad to see airline stocks rallying on expectations of a surge following the gradual re-openings, while Parker and his executive brethren and their congressional foot soldiers are shamelessly back at the trough pleading for more handouts.

    Still can’t wrap my head around why even among hospitality businesses, airline shareholders are singularly being lavished with huge amounts of cash to preserve their investments.

  5. They need to haul Parker and Isom in before House and Senate hearings and demand return of the money, or certification that they used the $$ for salaries. Why are we taxpayers footing the bill for their managerial incompetence?

  6. Paid to sit at home..i would take some of that so would everyone else who has lost their job due to COVID.But most of us did not get billions in a relief package..I bet the cruise ship folks are like hey where is our money. It is though unfair for those who went out voluntarily to get nothing. American is keeping 85%..I thought this was payroll protection money…oh sorry its shareholders protection money and executives. More wasted tax dollars..

  7. Bill…
    Cruise ships are not a major backbone of the economy like airlines are…. Mail, drugs including Covid vaccine, generators, food, you name it, airlines are critical. If you don’t believe that something is wrong. Next time when your dying relative is across the country and you need to get there, drive.

  8. Your so horribly bias against AA. Honestly wonder if your part of a propaganda team for Delta. I’m happy to work for AA and I do not feel taken advantage of at all.

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