How American Airlines Is Keeping Government Payroll Support For Itself, Not Giving It To Employees

The government’s $900 billion Covid relief bill passed at the end of December included $15 billion to airlines, on top of the $50 billion provisioned to U.S. airlines as part of the original CARES Act.

This was pitched as payroll support, meant to cover the cost of the less than 40,000 people who were furloughed or laid off from U.S. carriers. In exchange for the money airlines have to bring these people back onto payroll through March 31, and pay them retroactively to December 1, 2020. At an annualized cost of over $1 million per job, and not even guaranteeing jobs exist past March, this is the most expensive employment program in history.

Money goes to Delta Air Lines that never laid anyone off and had no plans to do so. That just goes into their kitty. American Airlines will receive about $3.5 billion and is supposed to pay roughly 19,000 employees for 4 months, pocketing the difference for themselves.

American Airlines won’t be bringing employees back right away. Most will be paid not to work. Furloughed flight attendants, for instance, won’t work until at least March and aren’t guaranteed work after March. And only one-third of furloughed flight attendants will work at all.

Not satisfied with keeping roughly four out of every five dollars for themselves out of government ‘payroll support’ American Airlines is trying to avoid paying workers the remaining dollar, too.

  • I already covered the ‘opt-in’ furloughed employees have to complete in order to get paid. Anyone who fails to certify their availability to work doesn’t get paid, with American keeping the money.

  • They’re taking an even harder-line approach with laid off non-union management and support staff employees.

Non-union employees who were terminated October 1, 2020 or later have a choice to make. They can give up any of the pay due to them under government payroll support – the choice American would prefer – or they can complete a certification:

  • “You must be available to return to work on a full-time basis at American if requested to do so at any time through March 31, 2021.” Employees must agree to be available to work any time, at American’s discretion, between now and March 31. They may have moved out of town. They aren’t being told whether American will make them show up or not. And they won’t have jobs after March 31.

  • “You must not be employed on a full-time basis with another employer.” Anyone that got another job, American is keeping the money.

    Such employment would be inconsistent with your availability to return to work at American and with the purpose of PSP2 to provide pay and benefits to individuals involuntarily separated from their employer and accordingly no longer receiving pay and benefits. PSP2 does not intend to provide redundant pay and benefits. If you become fully employed at any point before March 31, 2021, you must notify American so that we can discontinue the relief you are receiving from American pursuant to PSP2.

It’s priceless that American argues workers shouldn’t get the money because of the intent of government payroll support which (if you listen to the airlines, including American) wasn’t to provide a subsidy to the carriers themselves.

And by the way anyone that fails to complete the certification either way by January 27 is assumed to be forfeiting the money to American’s coffers.

American Airlines was given a gift by taxpayers of more than $2.5 billion, and the only requirement was they’d have to also pass some money onto employees that they let go. That, it seems, was too much to ask.

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, 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. So why does this surprise anyone? I would like to know if anyone out there believes that Parker has nothing to do with this one?

  2. How can they enforce this? Say I got another job somewhere else, but I just check off on the paperwork to American that I am unemployed. What could they do or how could they verify this? Also say I lived in Dallas I could just write down a Dallas address to keep the paycheck even if now I live in Alaska. The pay will likely come by direct deposit.

  3. What the hell is your problem? FIrst of all, this is not quite true and your spin on it is disgusting. I work for AA and I’m telling you all the spin on this is WRONG. For those union employees getting a paycheck and not working, that was the point – keep them on the payroll and connected to their healthcare to keep them off Unemployment and connected to their jobs. There are NOT enough flights to keep full staff coming in everyday. What you going to do with hundreds of Flight Attendants and Gate Agents and only 100 flights a day out of a station?
    THen if you worked for AA non-union and you have mouths to feed you need to get another job, but you can opt to return and quit new job if you want or don’t want.
    AA gave its employees a very Merry and Hopeful Christmas when this Administration was playing games with people’s lives and withholding the Cares or Heros Act. AA stepped up and gave employees paychecks by Dec 24th, Christmas eve, and it was no small feat to pull that together on a short timeframe after the cares act fell thru – they didn’t have to, but they knew if they didn’t many team members would be destitute with no money or any safety net.

    You have a major stick up your backside. This story is WRONG.

  4. I don’t understand. Why don’t airline employees collect unemployment payments with the understanding they are subject to recall when travel improves.

  5. I’m with @Ghostrider5408. To expect a weasel like Parker to play this one straight is expecting a leopard to change its’ spots.

  6. @Gary – can you contrast this with what UA or DL are doing differently / more ethically (if so)? Would be curious to see.

  7. I can confirm that UA is playing the same games that AA is with the PSP. You must opt back in for “temporary” work to be paid, and if you do not then you forfeit any pay. Scott Kirby is cut from the same cloth as Doug Parker, they are both hoodwinking our government when it comes to this assistance. The American tax payer just handed a huge bailout to both of these corrupt airlines in a way it was never intended to be. Kirby and Parker were pushing congress for this bailout knowing exactly that this scenario would happen and that they get to pocket the difference. Absolutely despicable. This deserves to make national news!

    @Gary – Do not let this story die, the truth needs to get out to the American people of what exactly these airlines are doing with taxpayer dollars.

  8. @Harman

    It is not the US taxpayers’ responsibility to subsidize airline industry employees. It is your employer’s duty under the agreement reached with the applicable union to pay you for services rendered. If there’s not enough work to provide employees, the result is CLEARLY spelled out in the labor contract. Furloughs in reverse seniority order, and you are then eligible for unemployment, like every other tax-paying worker in the country. You and all airline employees are no more important than any other worker in the country, no matter what alternative facts your union bosses say.

    If you don’t like the conditions of your employment, find another employer. It really is that simple.

  9. So what about the workers that have been working there since March, never laid off? Shouldn’t those workers get more if they are paying for people not to work who possibly have two jobs? No more airline bailouts!!! Let them fail!

  10. Give us the entire story Gary. Delta comes off like they are somehow above all the other airlines. The fact is Delta reduced its employees hours , effectively giving them a put cut of as much as a quarter of their pay. Yeah, great deal Delta. Stop leaving that part out Gary.

  11. Harman, Union workers at American should be treated no differently from maids at Marriott. Collect unemployment like everyone else or go find another job. Airline management and employees are the whiniest of whiners and the elite of Welfare Queens.

    This story is spot on.

  12. Not surprised, AA is a shit airline, really the worst of all US carriers which is already a low bar. They treat their employees like crap which manifests into horrible service for customers. Their CEO was one of the most active airline figures to go begging the govt for money…frustrating that our tax dollars don’t just go directly to the workers but instead get funneled through their incompetent management.

  13. The reason the Airlines are getting billions is because the government cannot mandate the vaccine. So instead, they give billions to the airlines to mandate it for them. Pay to play. Just a workaround to further control your life.

  14. Your article is so dumb. IS DELTA paying all the employees who took 0 paid lines or leaves. No
    So they are doing the same thing. Your article lacks substance or analysis. “Money goes to Delta Air Lines that never laid anyone off and had no plans to do so. ” so a zero hour pay guarantee is not the same as laid off? Technically no. But practically the same. Your a joke of a writer and analyst.

    And if u did your homework. The union contracts. The employees faught for require a recall with the employee accepting it. Get ur facts straight. Love to see who sponsors ur articles.. people take this as jounalism. Jokes on them

  15. Why anyone on these comments is sticking up for the airlines is beyond me.

    $85 billion set aside to prop up just the airlines. That’s like 11 companies. Works out to well over $5b each.

    Stimulus spending for civilians (450ish million ppl) was $2.7trillion or just over $5.77 per American.

    Yup. Youre not worth $6 to the government, but American Airlines is worth $7b.

  16. “ Funds received by these air carriers and contractors must exclusively be used for the continuation of payment of employee wages, salaries, and benefits.”

    Are you saying these airlines are breaking the law in plain sight?

    Also, employees at delta and United had their salaries absolutely slashed, and this money brings them back to full salary. Great hit piece for people who don’t know anything, but really pathetic for those of us who take three minutes to look for answers. Apparently that’s more than can be asked of you before writing garbage like this

  17. Corporate welfare. Nothing had changed. Still waiting on free healthcare and my student loans to be forgiven

  18. Why does the government treat airline employees any differently than the rest of us who were furloughed or laid off? Major resort hotels, attractions, car rental companies, etc. all faced reality and laid off or furloughed staff and all moved to unemployment. Why we’d pay airline employees full pay to sit at home doing nothing, then probably be eligible for unemployment benefits after March makes no sense to me at all.

  19. ARE YOU THICK? What part of airlines operating at a daily multi-million dollar loss, since last March, do you not understand? Did you really think that all of the money from the government would go to displaced employees? It is to help the airlines survive. ALL of the airlines are still operating at unsustainable losses and will continue to for the foreseeable future. Do readers really want air travel as we know it to cease?

    American has been generous with their employees and fought hard to bring them back. Getting them back to full operations takes time. Criticizing a process you clearly don’t understand is classless and shameful.

  20. Gary,
    These payouts to employees with PPP or unemployment are all Federal taxable income essentially making 35-45% (income tax, matching Social Security and Medicare premiums) of the dispersed funds a short term loan.
    Add the other taxes paid to state and local and 50% comes back to government coffers.
    Payments to foreign countries is money flushed down the toilet and/or into political family member’s pockets.
    We don’t need career politicians, we have career bureaucrats. Choose your poison.
    Elon Musk in 2024

  21. Plain and simple. These individuals should be treated the same as everyone else who works and has to suffer the economic effects of this pandemic. Put them on unemployment and that is it! Believe it or not, many normal line workers are getting paid by the taxpayers, US, over $100K not to work which is justified by some double talk nonsense on how critical they are to the county.

  22. You are spot on Gary, at least about AA. I will only speak on the management piece non union. Parker and his fellow management protected themselves. They originally said they would be decreasing 30% of management based on finance and pay scales not on just a straight 30 % reduction in staff. Saying they wanted to get rid of fat salary’s and hopefully those that could retire would. Well that wasn’t the truth. Directors and above protected themselves and their buddies. Not the most talented bunch and the ones that have been making the worst decisions for years. Those should have been the first ones to go. Then there were tons of internal open jobs where management could have assisted team members move into other departments but again managers directors and managing directors washed their hands. Talent was wasted to save the ones at the top. Investors should have been raising eyebrows. In general I don’t know who in their right mind even before the pandemic would have bought AA stock. Money was given by the government to support the industry but also to support the mass amount of people laid off. The amount that was given to the airlines as payroll support for laid off employees should have been that and nothing else. This isn’t about if you agree with it or not. If anything after payroll support the airlines shouldn’t have received anything as they at the top clearly can’t manage. Other airlines across the world are figuring it out and all AA is doing nothing. AA when not giving the payroll support to the employees that have been laid off is stealing. Some families have a sole provider that might work three jobs to take care of their family at once. AA made every employee that wanted option 1 physically come into them to show an id to prove they are who they are within a one week span. They are coming up with any excuse to not pay their people. They have had the money for months and are waiting till the very last minute to give it to those that need it. People have been on unemployment for months and have to keep requesting unemployment till AA pays them. The fact that the airlines get a payout is not the real issue. It’s that AA is stealing from the government and its people. Karma. The people should have had health cover since December and pass privileges again yet they avoided that till the beginning of February. It’s a horrible situation the problem is it’s the little people that are suffering. The ones that remained in hq are being treated like slaves having to do all the work of the upper levels because they are afraid due to job security. It’s a horrible environment. Most are supporting families and can’t do anything but say yes. So those level 5s and above are the ones that need to called out and prove that they are really worth their fat paychecks. Also to end with the company was pushing its employees to take the early out packages. It was having calls with employees to tell them to make the decision before the deadline. Multiple talks with level 5s trying to get their team members to take the package. When I saw that I knew this was the way AA wanted to avoid paying anything in the future. Note to all never take a package especially when the company is begging you to take it. Let them lay you off. Because all those ones that thought they could trust the company were completely screwed.

  23. 3rd bailout on the way. WARN notices have been given with the words Termination this time to support staff and management that were laid off in the summer of 2020. Question is will AA honor the terms of the 3rd bailout and pay support staff wages until September 2021?

  24. I know some non-union folks who were laid off, involuntarily retired. Whatever you want to call it. They will not be recalled as their positions have been eliminated. Yet, they will have to opt in to get the benefits as they have done under PSP2 for PSP3. So if they elect to get a full time job prior to 9/30 for example, AA has stated that they cannot take full time job somewhere else and notify AA. If they are not going to be recalled and not work at all for AA, how can AA enforce this? It appears that AA is using this threat in order to keep more money for themselves.

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