Tag Archives for subsidies.
American Airlines says they have too many employees to service passenger demand. The latest round of subsidies allows them to furlough again April 1. They haven’t sent out WARN Act notices yet. So they continue to being flight attendants back in for duty, with 1000 more told to begin April 1. They could find themselves working for just a matter of days.
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. American Airlines found a way not to do that with many of the employees they’ve laid off, however.
Southwest really is going to spend some of the bailout money on employees (perhaps 50%) which is how the government aid was sold – unlike United Airlines which is likely to receive about $3 billion and plans to only pay its 16,000 furloughed workers through March as-required keeping the rest of the taxpayer money for themselves and their shareholders.
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.
Government payroll support (subsidies) require airlines to pay their furloughed workers, and not to furlough any more, through March 31. Internal American Airlines documents show that most workers won’t be back to work before that meaning most will never be back to work.
The airline does not even plan for two thirds of flight attendants to work during the Payroll Support Program period, and internal documents show how they may reduce the amount of government money that have to pay out to employees – keeping more for themselves.
Internal American Airlines documents describe the carrier’s plan to pay employees not to work, as part of the federal government’s Payroll Support Program passed by Congress as part of its stimulus legislation.
U.S. airlines recalled furloughed workers based on the passage of Covid relief legislation which sends them $15 billion. But the President hasn’t signed the bill yet and posted to twitter that he now opposes it. He may not actually veto, but what happens if he does – could airlines be on the hook to pay employees, even without the government subsidies that led them to promise to do so?
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. United Airlines is telling the employees they’re recalling from furlough to expect to be furloughed again after March.
You haven’t been buying airline tickets, but the airlines are taking your money anyway. $15 billion in the latest Congressional spending package goes to the airlines, a second bailout. In exchange they have to bring back workers that have been involuntarily furloughed, and can’t furlough again until April 1.
$15 billion, retroactive to December 1, will be provided to cover four months of airline payroll. That’s $375,000 per furloughed worker at an annual run rate of $1.5 million per job, perhaps the most expensive jobs program in history.
Right now there’s a stronger likelihood of a second round of airline subsidies from the federal government than at any time in the past several months. It appears that $17 billion more for airlines is included in the next scaled-down federal stimulus bill, and legislative leaders in the House and Senate plan to bundle it with must-pass funding measures to keep the government running and avoid a shut down. Now legislators have a Friday deadline.
Airlines have deployed the argument that the vaccine means they need subsidies because they’ll have to scale up operations to be prepared for cargo shipments, and even though they’d be paid to ship cargo somehow they are unable to prepare for that on their own. This is, to put it bluntly, a lie. Here are 10 reasons why.
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 »
