Tag Archives for bailout.
American Airlines CEO Doug Parker’s whole career is built on government subsidies. His airline is the most vulnerable to bankruptcy. So when the chips are down they’re playing the game that’s worked out best for him: threatening small cities where American Airlines has a virtual monopoly on air service, and announcing cuts to 15 cities that impose pain on 28 different Senators.
American Airlines is suspending service to 15 cities effective October 7, and CARES Act subsidies are mentioned 3 times in the release that’s just 151 words. The airline makes clear that if a second bailout passes they’re prepared to serve these markets.
Airlines and their unions have asked for a ‘clean extension’ of the payroll support money, another $25 billion. However if that’s to save 75,000 jobs through March 31, 2021 that amounts to $333,333 per job and come April 1 we’ll see job losses again (when it’s not election season).
Seriously, has anybody actually done the math here?
Sixteen Senate Republicans have signed onto a proposal for a second airline payroll bailout. The measure, which would give U.S. carriers a second $25 billion injection, likely has enough votes to pass – but that doesn’t mean it’ll be in the next coronavirus relief package.
The stock market response to the news shows this is really a subsidy for airline owners. Meanwhile the funding is unnecessary, too late, and too much money to address the stated desire to protect workers.
Florida Senator Rick Scott thinks it is wrong wrong wrong that airlines took payroll support money and are going to turn around and furlough workers – and he wants to meet with airline CEOs to give them a piece of his mind!
Senator, let me save these CEOs the time of meeting with you so they can focus on saving their businesses.
Today American is sending WARN Act notices to about 25,000 employees, but they want those employees to lobby for more federal government subsidies to stay on payroll.
Huge waves were created this week when United revealed that travel bookings have been falling off. Things are headed south, it appears, and they’re sending out possible furlough notices to 36,000 employees. But they aren’t really going to lay off 39% of their staff, for four reasons.
Now that the Small Business Administration has released detail on the businesses receiving $150,000 or more in “PPP” loans, I was curious to see if there was any ‘double dipping’ by airlines, taking advantage of their own dedicated payroll support and also PPP funds which were meant to allow small businesses to continue to pay their employees.
It turns out there were at least 10.
Airlines want another bailout. They’ve been laying the groundwork for two months. The major unions are asking for full payroll through March. The American Airlines pilots union, at least, is trying to frame the subsidies as pro-consumer calling it the government ‘buying all the middle seats’ although in many ways that’s an even worse idea.
There are two things the airlines have going for them, and five reasons a bailout just isn’t going to happen a second time.
The heads of 6 major airline unions wrote to Congressional leadership asking for another 6 months of airline payroll – $32 billion for passenger and cargo airlines and airline contractors – to prevent employee layoffs through March 31.
This is a bad idea.
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 »
