Aviation and Labor Concerns Well Addressed in U.S. COVID-19 Stimulus Package
ALPA Pilots’ Efforts Add Critical Provisions to Protect Workers
From the moment that COVID-19 economic relief was considered, ALPA has been clear: Any relief package must put frontline aviation workers first to keep airplanes flying and our economy moving.
ALPA has been actively engaged in discussions of the bill, and the final legislation—the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)—will help stabilize the airline industry and protect frontline aviation workers.
The bill (PDF), agreed to by the U.S. Congress and the White House, reserves $61 billion for the airline industry, with much of it targeted for airline employees and their families.
Provisions That Will Immediately Stabilize the Industry
- $33 billion in direct grants for the continuation of payment of employee wages, salaries, and benefits of up to:
- $25 billion for passenger air carriers.
- $4 billion for cargo air carriers.
- $3 billion for contractors.
- Assurances that federal assistance is used to pay airline employees’ salaries and benefits, not executive compensation.
- Grant recipients are prohibited from making stock buybacks or paying dividends until September 30, 2021.
- Carriers that accept loans are forbidden until 12 months after the loan is no longer outstanding from stock buybacks and paying dividends.
- Prevents executive pay increases or severance packages for a two-year period until March 24, 2022.
- Grant recipients are prohibited from conducting involuntary furloughs or reducing pay rates and benefits until September 30, 2020.
- Allows the Department of Transportation to make loans and loan guarantees of up to:
- $25 billion for passenger carriers.
- $4 billion for cargo carriers.
- Any air carriers that accepts a loan must maintain its employment levels as of March 24, 2020, to the extent practicable and cannot reduce its employment levels by more than 10 percent through September 30, 2020.
- Protections to preserve and maintain the integrity of collective bargaining agreements and contract protections:
- For grant recipients, these protections from federal government demands for labor concessions lasts until September 30, 2020.
- For loans, this protection is in effect until one year after the loan is paid.
- For airlines who take advantage of financial assistance, grant money should flow to payroll within two weeks.
- The amount of salary and benefit aid each carrier will be eligible for will be based on the amounts paid to employees during the period from April 1, 2019, to September 30, 2019. The Treasury Department will oversee the application process and will establish rules and procedures for the airlines to submit the necessary information within 5 days of enactment of the legislation.
Collective Bargaining Provisions
The collective bargaining provisions in this legislation are a significant victory for labor and are in stark contrast to the situation following 9-11 when the government demanded that carriers seek labor concessions as a condition for receiving aid. The provision does not, however, prevent management from approaching unions for concessions or from filing for bankruptcy protection. It only prevents the government from demanding that carriers that receive assistance secure contractual relief from their unions.
Part of this funding will be secured by the issuance of impacted business’ stock to the federal government.
Other Provisions of Interest
Other rules included in the act are special rules for the use of retirement plans, including the waiver of penalties for early distributions and the raising of caps on 401(k) loans, a temporary waiver on required minimum distribution rules for defined contribution plans and IRAs, and delaying minimum funding for single-employer funded plans due during 2020.
Also of interest are provisions for students who dropped out of school as a result of COVID-19, excluding the term from counting against their lifetime subsidized loan or Pell grant eligibility, nor are they required to return already-issued grants or loans. Federal student loan borrowers are also able to defer loan payments, principal, and interest for six months without penalty.
ALPA’s Collective Efforts Recognized
As the bill was being considered, and our global industry experiences flight reductions, reduced work schedules, hiring freezes, furloughs, and shutdowns, tens of thousands of pilots sent more than 137,000 letters to their elected representatives and engaged extensively on social media urging lawmakers to protect pilot jobs by bringing economic relief and stability to this vital industry.
ALPA and its pilots applaud the bipartisan effort, especially the contributions of House Speaker Nancy Pelosi, Senate Minority Leader Chuck Schumer, House Transportation and Infrastructure Committee Chairman Peter DeFazio, and Senate Commerce Committee Ranking Member Maria Cantwell, whose efforts led to this critical, proworker legislation that will stabilize the U.S. airline industry and make certain that the same frontline workers who keep it moving safely each and every day also share in the economic relief it receives.
Moving Forward in the COVID-19 Reality
While a congressional relief package in the United States is welcome news, these times are deeply unsettling for ALPA pilots—both on the line and in our living rooms. In this new COVID-19 reality, each and every pilot is struggling to stay healthy and protect those we care about, while also confronting the disease’s ramifications on our industry and our careers. Pilots seeking additional guidance should continue to use our union’s Coronavirus Information for Flight Crews.
Airline Economic Relief and Other Efforts in Canada
In Canada, the government has also reached agreement on broad economic relief in response to COVID-19. ALPA Canada is engaged with the prime minister's office and various federal ministries to promote ALPA's priorities to stabilize the Canadian airline industry and protect frontline aviation workers, as well as ongoing discussions on possible measures for financial assistance.
As the situation continues to evolve, ALPA Canada is awaiting word on a potential stimulus package for airlines and their employees, including our pilots. ALPA Canada president Capt. Tim Perry has been in constant direct contact with the Transport and Finance ministers' offices outlining ALPA's key priorities and offering guidance on the types of stimulus required to best help our pilots.
In a letter to Transport Minister Marc Garneau, Perry highlighted air transportation as an integral and irreplaceable part of the Canadian economy that facilitates trade, plays an instrumental role in tourism, and ensures the movement of people and cargo throughout Canada and the world. He also emphasized ALPA's position that any relief or stimulus package must include responsible guardrails on how the funding and credit instruments operate, on whom relief should focus, and how it can be utilized by airlines that require the government's assistance.
The Canadian government needs to hear from you! Add your voice to amplify ALPA’s message through these Calls to Action: