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Labor groups slam Treasury for 'playing games' with airline bailout terms

April 15, 2020
3 min read
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Labor groups slam Treasury for 'playing games' with airline bailout terms
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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.

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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.

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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 by Image courtesy of Shutterstock.