Doug Parker: Republicans Promised To Break Ranks, Support Airline Subsidies In Biden’s Stimulus

Americans may be on the verge of receiving $1400 in Biden Bucks, but U.S. commercial airlines are getting $14 billion – including $3 billion for American Airlines. And according to the CEO of American, who has spent much of the last year working Capitol Hill, Republicans were ready to break ranks with their party to ensure that subsidies would flow to the airline industry.

In fact, the Republican Party may not have tried to remove these subsidies because it would have caused some of their members to defect and create bipartisan support for part of the legislation.

CEO Doug Parker, who spent all his time in D.C. lobbying for subsidies scoffed at Republican opponents of a second airline bailout in the fall, saying only “a handful of really fiscal conservative Republicans” refused to get on board because they “just viscerally disagree with the government doing anything that looks like you might be funding a business.”

Now, though, he told pilots at an internal Crew News meeting – a recording of which was reviewed by View From The Wing – that Republicans were so behind the third airline bailout contained in the $1.9 trillion American Rescue Plan Act that “I had a number of Republicans tell me last week that if someone tries to strike PSP from the American Rescue Plan..I’ll vote with the Democrats.”

He offered that companies are really good lobbying Republicans and unions are really good lobbying Democrats and when they work together they’re “really powerful.” Doing a bit of a victory lap, he declared “it’s been a lot of fun frankly.”

Taking money from taxpayers’ pockets and giving it to airline shareholders and creditors is so popular in Congress, in Parker’s telling, that the overall bill which passed without a single Republican vote would have garnered Republican support just to protect corporate interests. Parker suggests that Republicans may have opposed direct checks to taxpayers and bailouts for states, but would have crossed the aisle to support stimmie checks to airlines.

Parker acknowledges that it’s only (“particularly”) pilots that need to be kept on payroll and current for the airline to be ready, “once we go through the pain of furloughing pilots, and getting pilots to no longer be current in their current seats, it takes a long time to get back to where we can actually be ready to rebound.”

Even that is incredibly misleading. American only brought 11 pilots back from furlough to active status first the second round of payroll subsidies. The other 1500 were paid not to work. And even those 11 haven’t flown, as I understand it. It’s not clear that they’ve even begun their training. About 350 pilots should be returning to flying status at the start of April – but that just means they need to be fingerprinted prior to April 1. Payroll subsidies aren’t actually keeping pilots active and ready.

In fact, Parker acknowledged that these subsidies are cash in the bank for the airline, suggesting that in addition to their pre-existing $14 billion in liquidity “we now have with this PSP3 that raises another $3 billion or so to American Airlines, that’s certainly helpful.” That gives up the game – this was money for shareholders and creditors with employees as a fig leaf. He also pointed to the role unions played lobbying for this, “A lot of this needed for the company to be in the background so it wasn’t a corporate bailout.”

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. Biden Bucks?

    I don’t remember you calling the previous payments “Trump Bucks” even though they famously had his name on them.

    The extra $1400 was supported by President Trump (only after Congress had negotiated and passed the last round of $600) and by both of Georgia’s Republican senators at the time (who both lost as you no doubt remember).

    Gary, it sounds like your pining for a visceral response from your readers with the language here.

  2. @Daniel – I just found it amusing, like “stimmies” – Trump Bucks wouldn’t have been alliterative. Gosh, I’m usually described by readers as too left wing to IDK.

  3. @ Gary — There should have been no/should be no stimulus. It is all stealing from the responsible who saved for rainy day. Why be responsible, when the irresponsible will just rob you blind every time?

  4. @Gary, you seem to believe that Republican politicians were telling Parker the truth. The other, and more likely possibility is that they were telling him what they thought he wanted to hear and what they thought might get his support (lobbying and fundraising) without ever intending to do what they were saying. Knowing that a situation won’t arise makes it easy to dole out such promises.

  5. Parker is one of the least likable figures in the industry, IMO. Maybe he should accelerate his transition out of AA and get into lobbying. Seems like he’d be a good fit.

  6. This isn’t rocket science: unionization is generally bad for both shareholders and employees, except when you need votes from both sides of the political aisle. Covid is a once in a lifetime situation where unionization is FANTASTIC for USA airlines. It’s not particularly good for taxpayers, but if you’re a frequent flyer and the Feds are handing out money like candy, it’s not bad for the airlines to get some of it. Is it “fair”? No, it’s not fair. But it’s politics.

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