President Donald Trump and treasury secretary Steve Mnuchin
promised anew Tuesday that the federal government will buoy U.S. airlines
against the deep losses from a clampdown on travel due to the Covid-19 virus.
policymakers consider the request by the Airlines for America (A4A) trade
group for a rescue package of $50 billion in grants and government-backed
interest-free loans for passenger carriers, other industry stakeholders are
calling for the imposition of new regulations on airlines in exchange for any
federal aid package they receive. They are also demanding that federal relief
focus sharply on the airline workforce.
“We are pushing for
any relief to include restrictions on stock buy backs, dividends, executive
bonuses, using funds in any way to undermine worker rights — in
addition to other key provisions for long-term protections for workers, our
families, our contracts, and our jobs,” said Sara Nelson, who heads the Association
of Flight Attendants-CWA.
Nelson also called for relief to be structured so that
furloughed workers continue to receive paychecks and healthcare.
Other industry unions have made similar pleas. In a letter
to Trump, House speaker Nancy Pelosi and Senate majority leader Mitch McConnel,
Air Line Pilots Association (ALPA) president Joseph DePete wrote, “We are
unequivocal that any economic relief package must contain strong labor
protections for the airline employees who have — or will — suffer financial
harm, experience quarantine or treatment, or need to care for a loved one.”
Similarly, the Service Employees International Union (SEIU),
which represents contracted airline ground workers, such as cabin cleaners and
wheelchair attendants, is calling for layoff protection, paid sick leave and
affordable health care be included in any relief or bailout package.
A4A said Monday that its 10 members currently have combined
liquidity of $39 billion. Still, the trade group projected that every cent of
that could dry up during the second half of this year in the absence of federal
aid. Even under the group’s optimistic scenario, liquidity would decline 59% by
A $50 billion package would dwarf the $15 billion airlines
received from the Bush administration in the aftermath of 9/11. Despite the aid, most U.S. airlines declared bankruptcy after 9/11.
At a press briefing Tuesday, Mnuchin said that the Covid-19
crisis is worse for airlines than 9/11, but he said the administration is
focused sharply on assisting carriers.
“The airline industry will be in good shape,” added Trump.
Critics, nevertheless say that airlines haven’t done enough
to prepare themselves for this crisis during their run of record profits over
the past several years. U.S. carriers recorded net profits of more than $97
billion beginning with 2013 and extending through the third quarter of last
year, which is the last quarter for which the Bureau of Transportation
Statistics has released data.
But during the last six years, American, United and Delta
alone have spent $31.3 billion on share buybacks, according to figures provided
by House transportation committee chairman Pete DeFazio (D-Ore.) during
a January hearing.
“Travelers United finds the plight of airlines amazing,
especially with their tens of billions of dollars of profit over the past few
years,” said Charlie Leocha, CEO of consumer group Travelers United.
Consumer advocates have joined unions in calling for new
constraints on airlines as part of any relief package for the Covid-19 crisis.
On Monday, Sen. Edward Markey (D-Mass.), a frequent airline critic, called for
any infusion to airlines to include limiting change and cancellation fees,
protections for airport workers, the development of long-term emissions targets
and special consideration for regional carriers not represented by A4A.
Leocha said airlines should be required to more clearly
disclose all costs, including ancillary fees, cancellations fees and change
fees and those fees should be reasonable, matching airline costs. He also
called for other measures, including reducing the major airline dominance of
landing rights at capacity-constrained airports and providing clearer recourse
for aggrieved airline passengers.
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