Tag Archives for bailout.
This week’s guest on the Airlines Confidential podcast was flight attendants union head Sara Nelson. Since retirement, Doug Parker has been taking victory laps with her over their ability to work together to secure three rounds of massive subsidies during the pandemic.
In a leaked video, United Airlines CEO Scott Kirby told employees that they need to lay the groundwork for future government bailouts.
Airlines are rewriting history, pretending they used bailout money to be prepared to fly when they really pocketed it for themselves. And the ‘really bad stuff’ that would have happened without bailouts wasn’t ever true.
The narrrative matters because we’re going to see airlines back at the public trough again in the future. Investors know their downside is limited because taxpayers will always be there. And that’s abhorrent.
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.
One thing that’s boosted how much money American Airlines keeps for itself out of the second bailout 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.
The federal government committed $65 billion in grants and subsidized loans to airlines in 2020, and is now considering a third bailout. While the funds were marketed as protecting jobs, only about one eighth of the second bailout actually went to pay workers who had been furloughed (and airlines that never furloughed anyone received billions).
After bailouts during the Great Recession there was a national conversation recognizing that bailed out companies weren’t really private enterprises and the need to make sure bailouts never had to happen again.
Get ready to have your pockets picked, again.
Democratic congressional leaders are expected to back a third airline bailout of $14 billion for airlines and $1 billion for contractors.
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. Per furloughed worker this was the most expensive jobs program in history (at over $1.1 million annualized per job) and American says it’s only spending 10% of the $3 billion it received on furloughed workers.
American’s flight attendants union says it was told to prepare for a new round of WARN Act notices, so we may be starting layoffs all over again – and they along with another union are asking the government for a third airline bailout. Maybe this time most of the money won’t go to shareholders and creditors instead of workers.
American Airlines is bringing back its furloughed employees, but no flight attendant will actually return to work until March 2. Only one-third will return in March. And the government only requires employment through March 31, in exchange for the roughly $3.5 billion they should receive.
The Association of Professional Flight Attendants, which represents American’s cabin crew, plans to push for a third bailout.
Texas Senator John Cornyn is calling for more airline subsidies and the arguments being deployed now are even crazier than before.
These payroll subsidies have become more expensive and cover a shorter period of time, even though airline payrolls are lower than they were during the first bailout. And deploying the argument that vaccines won’t be transported without airline subsidies is both terribly cynical and untrue.
Conventional wisdom was that airlines would get a second bailout. J.P. Morgan analysts said last week it’s a question of when, not if. The drive for a bailout was led by labor, and their candidate is increasingly looking to have won the Presidency. But a bailout for airlines – and other sectors of the travel industry – is now far less likely.
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 »
