Congress Agrees To Second Airline Bailout. United’s CEO Prepares To Ask For A Third.

The new $900 billion package of coronavirus and non-coronavirus measures is over 5000 pages long, and even talks about eating horses. And packed in there is $15 billion for airlines, ostensibly to get them to hire back furloughed workers. But there’s only about 40,000 furloughed workers, and the $15 billion is only meant to last four months – pay is retroactive to December 1.

Now that the second airline bailout is done – the CARES Act contained $50 billion plus invaluable tax relief for U.S. airlines – United Airlines CEO Scott Kirby is already positioning for a third bailout. This is what J.P. Morgan Chase told investors would happen in October and by the way they characterized this to investors as money for airlines and not ‘payroll support’ (in other words, the truth). Delta for instance will get about $3.2 billion to avert furloughs even though they never furloughed anyone.

Here’s Kirby,

Now, those employees who are eligible under the terms of the PSP extension can temporarily come back to United through March 2021. This is certainly good news for our economy, our industry, and our airline – but it’s especially good news for those who have been without a paycheck, and we can’t wait to welcome them back.

Importantly, though, we don’t expect customer demand to change much between now and the end of the first quarter of 2021. United has been realistic about our outlook throughout the crisis, and we’ve tried to give you an honest assessment every step of the way. The truth is, we just don’t see anything in the data that shows a huge difference in bookings over the next few months. That is why we expect the recall will be temporary.

Airlines said they needed payroll support through March 2021 so that they’d keep their employees connected to the airline and fully trained, so that they’d be prepared to fly when the economy recovered – and so they could transport vaccines.

However United Airlines is telling the employees they’re recalling from furlough to expect to be furloughed again after March. That doesn’t keep them connected to the airline until the economy recovers. And most vaccine shipments, best on production schedules, will happen after March.

The ink was barely dry on the first bailout when Kirby started positioning for the second one so it’s no surprise he’s already positioning for a third. Will he get it?

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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  1. This is just insane what the congress is doing. Airlines are nothing but parasites and a blight on society. They want to live off the taxpayer and give nothing in return. This is all going to come home some day and when it does it’s going to make 1929 look like a picnic and the 30’s like an extended recess.

  2. Talk about business interests hooked to government-provided corporate welfare as well as to governmental cutting of taxes for the wealthiest.

  3. I am a UA flight employee. A couple of months ago UA closed 3 international FA domiciles in NRT,HKG and FRA, those that could not work in the US were terminated on OCT 01. Now with Cares act 2 , UA plans to bring them back even with no base to work out of and pay them 71 hours a month to sit at home. How is sending US tax dollars to foreign nationals who pay NO US income taxes and live outside the US “stimulating” the US economy and helping UA survive?? This is insane!

  4. Am I missing something? Don’t these furloughed employees get unemployment payments and qualify for other government programs (food stamps, etc)? Also won’t most furloughed employees be recalled by summer when things return to normal?

  5. @ John C – Yes they do and if I remember correctly they are also getting a subsidy above and beyond unemployment. And they also retained their “travel benefits” which drives up the cost to the airlines as every pound cost money. I’m not sure but I think they also still have their health benefits but I’m not entirely sure. I know people in the airline industry and they don’t want them back because most were lazy and there isn’t enough hours to go around. Normal by the summer? Unlikely as 42% of the population are saying they won’t take the vaccine and there is going to be a flood of small business closings coming. But remember they are “there for your safety!”

  6. @Bob – A breath of fresh air to see an airline employee questioning the “free” money being handed out. The bigger question is why is the US taxpayer paying anyone 71 hours pay a month to sit at home and do nothing? Wait staff can make nothing because of the closures, small business had to close but Home Depot could stay open. We are north of 150,000 small business failures since 3/1/2020 with an expected wave starting next month, with or without PPP. All of this is OK but for someone reasons the airlines can’t share in the pain the rest of the country (world) is going through. And now they are already talking about another round of bail out money and the first dollar hasn’t gone out. This is just insanity!

  7. I hope they can still fit in their uniforms as people usually gain weight from knoshing and munchies from not working. Airlines don’t need an added expense of new crew uniforms.

  8. Why not keep pretending. Way past time for the worthless Congress to simply nationalize the Big-4 into one and run it just like all the other incompetent government entities. . They could just roll it up into the Post Office The ongoing management of the airlines already qualifies them for this classification and now they are just as much “on the dole” as the others have been for years. Incredible, these vultures have no sooner sandbagged a second hand out and they are looking for more. Time to call the farce.

  9. @OneXMarine- That’s usually not my style to talk like that but I have worked with so many who were rude to passengers for no reason at all. I always had a very fixed reason I was nice to all my passengers- after several hours those magic exit doors were opened and I was in Paris, Rome, Tokyo, Rio! The American F.A.s felt that way. When PanAm hired overseas before President Carter said all American carriers had to hire Americans and could only hire overseas if couldn’t find enough qualified they hired Americans.things got a lot better for passengers and crew. The only place I didn’t like was Dhaharin, Saudi Arabia with a 3 day layover. Some one asked if they still get their medical benefits and I can almost say for sure they do. When companies as large as these airlines are they are self insured, it’s cheaper for them. When they offered us golden parachutes to leave- l got $ 10000, full flight benefits for 3 years, and complete medical and dental insurancefor ten year service. More years service got more . Which I didn’t have to pay on my new job which luckily for me had a severe shortage of traind people.

  10. @IP – You’re spot on. The airlines have gone from a business to professional beggars. Maybe the F/A’s and G/A’s should get cardboard signs that say “I’ll be nice for $$$. Anything helps! God Bless!” Some of them you couldn’t pay them enough money to get them off the jump seat and give up their Candy Crush game to do anything. Just as well nationalize them, service won’t get any worse.

  11. @OneXMarine – I had respect for your comments, all the way up to: “remember, they are “there for your safety””. Why the quotation marks?
    The minimum safety crew is dictated by the FAA, and very few airlines are staffing significantly higher – specially during the pandemic.
    If the crew is not there – YOU will not be there.
    If the airline could get away with just putting on 1 or 2 fa’s on a large aircraft to serve you your drink – don’t you think they would do it?
    They are literally there to save your ass – not kiss it.

  12. @viking9990 – The “they are there for your safety” is kind of an inside joke. Used to be part of the safety briefing or at least some of them said it. It usually meant they weren’t going to do anything they don’t have to do. I don’t want any one to kiss my ass and looking at most of the F/A I wouldn’t want them to kiss my ass or get very close to it. All that being said if you think 3 – 5 of you are going to save a whole plane full of passengers don’t trip on your cape. I’ve never been in a plane crash and hope that is one experience I never have. That being said if the plane goes down and anyone is fortunate enough to survive the crash it’s going to take more than a handful of you to save people. Passengers on board who could be military, ex-military, first responders, etc. will have to jump into action to help those that are injured or scared out of their wits. You can’t do it all. And you’re assuming that you’re going to be standing when the chaos begins. My assumption is that you bleed just like the rest of us.

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