In December Congress passed a $15 billion airline payroll bailout, requiring airlines to bring furloughed employees back to work and pay everyone December 1 through March 31, 2021. That bill, pitched as “payroll support,” comes at an annualized cost at over $1.1 million per furloughed employee – the most expensive jobs program in history.
And it doesn’t even bring most employees back to work – it really does just pay unemployment.
At American Airlines, for instance, no flight attendant starts back before March 2, and only one-third will work at all before the end of March when the requirement for airlines to keep everyone on payroll in exchange for the money expires.
Over the summer American laid off 1500 management workers who didn’t take voluntary exit packages. Here’s how they’re avoiding paying non-union employees they let go, keeping more of the payroll money for themselves. American also furloughed 17,000 union employees. (This boosted the average flight attendant age to about 56.)
Now we’re about the start the whole thing over again. The American Airlines flight attendants union has been told by the company to prepare for another round of WARN Act notices which are required in the event of mass furloughs,
[D]ue to growing uncertainties in both international and domestic demand, we might again find ourselves overstaffed. As a result, the Company may be sending a second round of WARN letters to employees across the Company.
American Airlines is only spending $300 million of the $3.1 billion received from “Payroll Support Program 2” according to airline President Robert Isom in the airline’s January earnings call (“the number added back to salaries is about $300 million, which is the amount of money that we will have higher salaries due to PSP2 coming back.”). Yet despite all this government cash to keep people employed they do not plan to do that.
As the second government airline bailout was signed flight attendants began pushing for a third bailout. I’m not sure how management keeps hoodwinking them into fronting for this, when equity and debt holders are keeping 90% of the money.
The head of AFA-CWA (which represents United Airlines flight attendants among others) and the APFA (which represents American’s flight attendants) wrote a letter to the President and Congressional leaders asking for another $15 billion for airlines. Credit to J.P. Morgan Chase’s Jamie Baker who told investors in October to bank on the second bailout and expect a third request as they considered how to value airline stocks.
Southwest Airlines promised to spend about one-third of its second bailout on employees they would have furloughed, so that they’re already not going to furlough anyone in 2021. Delta hasn’t furloughed any employees, but as a result of each bailout they both receive billions of dollars ostensibly meant to pay furloughed employees anyway. So yeah, let’s go for round three.