Tuesday, April 14, 2020
American Airlines Will Accept Payroll Support from U.S. Treasury
This evening, American Airlines announced an agreement in principle with the U.S. Treasury in which American will receive $5.8 billion in payroll support as a result of the CARES Act. This payroll support will come in the form of $4.1 billion in grants and $1.7 billion in low-interest loans.
APFA members and aviation workers from labor unions industry-wide collaborated and activated at a decisive moment, and the result saved jobs. The payroll grants were of particular importance to aviation workers because Congress required that they be tied directly to employee payroll and benefits, and ensured that workers cannot be furloughed involuntarily through September 30th, 2020.
The Secretary of Treasury was given broad authority to set conditions on the relief money. Despite insistence from the airlines and many labor unions, Secretary Mnuchin decided that all the major air carriers would be required to repay some of the grants. This is why the $5.8 billion that American will receive is being given in the form of both grants and loans. The Treasury Department was firm in their intent to require that 30% of the payroll support come in the form of low-interest loans secured by stock warrants. Flight Attendants across the country were vocal about how this could affect our industry, and might actually undermine the intent of the aid and the intent of Congress, which was to save aviation jobs. However, we are glad to see that our company has accepted the payroll support that will allow the aviation industry time to recover.
APFA is appreciative of our strong advocates in Congress. We have to thank Transportation & Infrastructure Committee Chairman DeFazio, Aviation Subcommittee Chairman Larsen as well as Speaker Pelosi and Minority Leader Chuck Schumer who never wavered in their support of workers’ rights. This was truly a bipartisan effort and we appreciate our Texas representatives who spoke up for us, including Senator Cruz and Congressman Allred.
The decision of the Treasury to require 30% of the “grants” to be repaid leaves us with mixed feelings. APFA members know that our jobs are protected through September 30th as Congress intended. However, we need our airline to be healthy beyond September 30th, and much of this depends on the containment of the virus and the demand for safe air travel. Securing the payroll grants was of tremendous importance to our workgroup, since we are all well aware that we will be overstaffed this summer. As the aviation industry navigates the uncharted waters in the months ahead, yet again Flight Attendants live to fight another day. We are proud of our members for mobilizing at the crucial moment that ensured the CARES Act was passed and signed into law. This activism will be needed again. The months ahead may not be easy, but by continuing to stand together, we will persevere.
“Thousands of APFA members mobilized to guarantee that aviation worker protections were included in the CARES Act. Standing together in collaboration with unions across the industry, we opposed executive compensation and stock buybacks that utilized this taxpayer money—and as a result, the grants that the airlines are receiving are exclusively for frontline workers who are bearing the brunt of our industry’s collapse. It is disappointing that Secretary Mnuchin chose to disregard what the overwhelming bipartisan majority of Congress intended in the CARES Act. By turning a portion of the worker payroll grants into loans, Flight Attendants face more uncertainty in the future. As essential workers, we have already risked our lives to help our fellow citizens return home, and transport medical resources and emergency personnel to hot zones to save others. Congress understood this risk and further understood that aviation workers would be vital to reenergizing the economy when the time comes. Flight Attendants have persevered through many tragedies and crises, and above all we are resilient, and we live to fight another day to protect our profession.” – Julie Hedrick, National President, Association of Professional Flight Attendants, representing over 27,000 American Airlines Flight Attendants
APFA National Government Affairs Representative