Labor groups slam Treasury for ‘playing games’ with airline bailout terms

Apr 15, 2020

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Airlines and the U.S. government reached a deal Tuesday that will open the cash taps and help keep the carriers aloft for at least a few months.

And while unions that represent many airline employees have praised the deal for keeping their jobs secure — for now — that enthusiasm is tempered with concern that the longer term outlook for airlines may still be grim.

“We do not believe these grants are being implemented as intended in the bipartisan CARES Act,” the leaders of the Association of Flight Attendants said in a letter to their members Tuesday.

Sign up for the free daily TPG newsletter for more airline news.

In a separate statement, Sara Nelson, the organization’s president, said that Treasury secretary Steven Mnuchin was “playing games” with the aid.

“We have seen what happens when investment bankers like Secretary Mnuchin control the outcomes, and we’re going to make sure that doesn’t happen again,” she said.

According to Joe DePete, the president of the Air Line Pilot Association, the concern is that much of the aid to airlines is now being treated as loans instead of grants. Requiring airlines to pay back the funds, he said in a statement, “will make it harder to stop layoffs and slow the recovery.

“In spite of this,” he continued, “we remain optimistic that more carriers will avail themselves of this funding — and that Congress will seek to overturn the constraints placed on this worker assistance program.”

Related: Airlines strike bailout deal with feds to stave off layoffs.

The Transportation Trades Department, a consortium of various unions that represent airline workers, was even more direct in its criticism.

“The decision by the Department of Treasury to turn a portion of those grants into loans is irresponsible and without merit, flies in the face of Congressional intent, and creates a long-term burden that is likely to harm the very people the grants were designed to help: frontline aviation workers,” the group said in a statement.

Not all unions expressed such concerns though. The Allied Pilots Association, which represents American Airlines pilots, said it was pleased with the aid package, without any qualifications.

More: How long will US airlines’ cash last? Between 4 months and a year, analyst says

“We are deeply grateful for the support of Treasury Secretary Mnuchin and for the bipartisan efforts of the White House and Congress. Today was an important step toward ensuring that our industry and nation remain strong during this battle,” Eric Ferguson, the group’s president, said in a statement.

Travel demand continues to stay depressed as the coronavirus pandemic drags on, and it’s currently unclear what aid will be available to airlines come fall when the terms of the current package expire. It’s possible that the government will pass another aid package, or airlines may have to turn to the private sector for continued support.

Featured image courtesy of Shutterstock.

Chase Sapphire Preferred® Card

WELCOME OFFER: 80,000 Points

TPG'S BONUS VALUATION*: $1,600

CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 toward travel when you redeem through Chase Ultimate Rewards®.
  • 2X points on travel and dining at restaurants worldwide, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 80,000 points are worth $1,000 toward travel.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.
Intro APR on Purchases
N/A
Regular APR
15.99%-22.99% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.