Published on : Monday, March 23, 2020
Major U.S. airline executives warned that the lawmakers on Saturday that if they did not immediately pass worker payroll protection grants, many airlines would be forced to furlough employees. In an attempt to weather the coronavirus crisis, the airline industry has been trying to obtain financing in the credit market and has taken unprecedented measures such as slashing flights, cutting executive pay, offering employees unpaid leave and parking hundreds of aircraft.
Despite measures to keep costs down, U.S. airline executives warned House and Senate leadership that “time is running out” to protect the industry’s 750,000 employees. The breadth and immediacy of the need to act cannot be overstated,” executives wrote in a joint letter to lawmakers. It is urgent and unprecedented.
The Chief Executive Officers of several major U.S. airlines have spent the past week meeting with members of the administration and Congress and have asked for $58 billion in aid.
On Saturday, the airline executives promised that if the industry receives at least $29 billion in cash grants they will not furlough employees and will agree to accept limits on executive compensation and eliminate stock buybacks and dividends.
The Coronavirus Economic Stabilization Act of 2020 would provide the $58 billion to passenger and cargo carriers through loans, but it would bar cash grants.
The Unions like the Association of Flight Attendants-CWA joined in the fight with airlines on Saturday, pleading for direct federal money.
AFA-CWA President Sara Nelson said that this is not another bailout for the airlines and giant corporations.
Delta Airlines CEO Ed Bastian said on Friday that 13,000 of its employees had taken voluntary unpaid leave. United Airlines confirmed that the “thousands” of employees also took leave. A few hours later, United announced it was reducing international capacity by 95% for the month of April.
The International Air Transport Association has estimated airlines, globally, may need up to $200 billion in aid.