Airlines vow to defer layoffs if they get cash assistance

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Airplane on tarmac
Photo Credit: Senohrabek/Shutterstock.com

Over the weekend, U.S. airlines promised to hold off on any layoffs until at least September if Congress provides $29 billion in grants.   

Still, airlines seem to be facing an uphill battle to secure cash assistance while Congress continues negotiating a Covid-19 stimulus package for the entire nation that could amount to as much as $2 trillion. A new vote on the bill could come as soon as Monday. 

Senate Republicans have proposed extending up to $58 billion in guaranteed loans to passenger and cargo airlines as part of the stimulus package. But on Sunday, a procedural vote on the bill failed with a 47-47 tie. The bill needs 60 votes for Senate passage. Media sources, including Politico and CNN, reported that the primary cause of concern for Democrats was that it did not place sufficiently strict guidelines on the approximately $500 billion that was to go to corporations in the form of grants or loans. 

Aware of such concerns, Airlines for America (A4A) pledged on Saturday to eliminate stock buybacks and dividends for the life of the loans and to place limits on executive salaries if they received $29 billion in grants. They also committed to conducting no furloughs or layoffs through Aug. 31. 

“Given the extreme nature of this situation, we respectfully urge Congress not to pursue opportunistic measures that will hurt, not help, our ability to recover,” reads the letter. “Unless worker payroll protection grants are passed immediately, many of us will be forced to take draconian measures such as furloughs.”

The letter is signed by the CEOs of A4A members Alaska Airlines, American, Delta, JetBlue, United, Southwest, Hawaiian, UPS, FedEx and Atlas Air. 

While U.S. airlines have steered clear of furloughs to date, layoffs have begun among contracted airport groundworkers, such as wheelchair attendants and baggage handlers. Some 5,400 of the 32,000 contracted airport workers represented by the Service Employees International Union (SEIU) had been laid off by Sunday, spokeswoman Leslie Kamstra Mendoza said. In total, there are approximately 125,000 contracted airport workers nationwide, she added, so the true layoff figure is surely much higher. The SEIU is calling for groundworkers to be protected in any airline rescue package. 

Meanwhile, regional airlines are also urgently appealing for grants to accompany loans. The current Senate proposal, which offers only guaranteed loans, would be especially onerous to regional carriers, according to a letter signed Saturday by 14 CEOs of regional airlines, since most of their fleets are leased and therefore couldn’t be used as collateral. Two-thirds of U.S. airports are serviced only by regional carriers, the letter reads.

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