U.S. Federal Aid Still Needed to Maintain Strong Airline Industry

By John Perkinson, Senior Staff Writer

While the payroll support program of the CARES Act offered an initial $32 billion to help U.S. airlines preserve jobs, more aid is needed. Since the World Health Organization declared the COVID-19 outbreak a global pandemic in March, the U.S. airline industry posted $12 billion in losses for the second quarter of 2020 and is projected to declare another $11 billion shortfall for the third quarter.

A healthy aviation industry is vital to the American economy, and ALPA has been working with other aviation stakeholders to wage an aggressive, multitiered campaign, urging the federal government to extend the Payroll Support Program until March 31, 2021, to avoid the layoff of an estimated tens of thousands of airline employees. This extension must apply retroactively to restore the jobs of aviation workers who’ve already been furloughed. The House of Representatives, Senate, and White House have all expressed support for getting a deal done.

However, disputes over a more comprehensive COVID-19 relief package have resulted in a stalemate, presenting the aviation industry with an immediate challenge. Not surprisingly, Delta Air Lines, United Airlines, and American Airlines have announced plans to furlough or displace more than 36,000 workers.

Despite ongoing congressional and administration deliberations and the distractions of the presidential election, ALPA and its members have kept the pressure on. The union’s pilots and their families participated in the Association’s Call to Action, sending more than 320,000 letters and e-mails and 120,000 tweets to date, and making more than 2,000 phone calls to Members of Congress in support of the union’s campaign. However, more than a month after the deadline, an airline payroll grant extension is no closer to enactment, and the airline industry remains in a perilous position, with several carriers including Compass, ExpressJet, and Trans States forced to close their operations.

While the news is bleak, there are signs of hope. Demand for passenger travel is slowly beginning to rebound. In addition to the $32 billion in payroll grants, Title IV of the CARES Act made available $25 billion in loans to passenger airlines, and just before the September 30 deadline, the U.S. Treasury Department announced that it would extend loans to Alaska, American, Frontier, Hawaiian, JetBlue, SkyWest, and United.

Also, several ALPA pilot groups, including Alaska, Delta, JetBlue, Spirit, and United, have been negotiating cost-cutting measures to delay involuntary pilot furloughs. Several of these deals are contingent upon large numbers of senior pilots agreeing to voluntary early retirement programs (see "A Tribute to ALPA Pilots Taking Voluntary Early-Out").

The initial CARES Act relief was vitally needed by the aviation industry, given the unprecedented decline in passenger air travel. Not since 9/11 has the U.S. airline industry seen this scale of relief from the federal government. However, the payroll support program is different from other previous financial assistance in that it specifically focuses on labor.

The U.S. Treasury Department stipulated that the amount each participating airline would receive would be based on its payroll expenses for the six-month period from April through September 2019. In addition, these grants were earmarked exclusively for the payment of employee salaries and benefits, not executive raises or severance packages. Airlines that received payroll support were banned from conducting involuntary furloughs or displacements and couldn’t cut pay rates or benefits until after the September 30 deadline.

However, with that date having expired, airlines and airline jobs remain in jeopardy. In a letter to Members of Congress earlier this year, Capt. Joe DePete, ALPA’s president, highlighted that a CARES Act extension could “provide the capacity the industry needs to bounce back quickly when the pandemic recedes. A simple reauthorization of the program requires no additional requirements or lengthy processes to secure agreements between the Treasury and airlines.” ALPA continues to urge Congress to pass legislation that provides meaningful assistance to the frontline workers who keep the aviation system moving safely each and every day.

This article was originally published in the November 2020 issue of Air Line Pilot.