Saturday, April 11, 2020
Update: Payroll Grants Contained in the CARES Act
Just over a week ago, American Airlines applied for a portion of both the $25 billion in grants and the $25 billion in loans, as provided for by the CARES Act. The grants were specifically designated to cover the cost of employee payroll and prohibited involuntary furloughs through September 30th, 2020. As you are aware, the current public health crisis has caused a severe drop in the demand for air travel, and it has been widely acknowledged that the airlines would not be able to sustain themselves until the demand for air travel returns. Considering the unclear timeline of when the virus would be contained, Congress acted in the best interest of the more than 2 million aviation workers in the United States by fighting for these workers-first grants that protect our jobs.
Last night, Secretary Mnuchin laid out the Treasury Department’s aid offer for the airlines. Of the details that have come out, we know that the Treasury is trying to require that 70% of the $25 billion grant allotment be given in the form of grants and the remaining 30% given as loans. This is contrary to what Congress intended, which was a full $25 billion provided through direct payroll grants. Just before the final passage of the CARES Act, Secretary Mnuchin was given broad authority to require some compensation for the grants, and thus far, he has chosen not to relax this condition. If 30% of a grant has to be repaid, it is no longer a grant – it is a loan. Aviation has an essential role in transporting critical supplies and medical personnel to combat this pandemic, and we want our airline to be healthy and poised to lead our nation’s economic recovery as soon as possible.
“We are disappointed that Secretary Mnuchin is choosing to disregard the specific intent of the CARES Act by trying to turn a portion of the grants for air carriers into loans. Flight Attendants have been on the front lines of this crisis from the earliest days. As essential workers, we have risked our lives to help our fellow citizens return home. We have transported medical resources and emergency personnel to save others. Over a hundred of our members have contracted the virus thus far—Congress understood this risk, and further realized that aviation workers would be vital to reenergizing the economy when the time comes. The Treasury Department must heed the intent of Congress and minimize the unnecessary burdens that risk front-line jobs in any deal they strike with the air carriers.”
– Julie Hedrick, National President, Association of Professional Flight Attendants, representing over 27,000 American Airlines Flight Attendants
We will continue to monitor further discussions between the Treasury Department and our airline to ensure that APFA members are protected, and that the intent of Congress is upheld. Please be prepared to act when we call on you—we all need to stand together during these difficult times.
APFA National Government Affairs Representative