The government is trying to maintain airline jobs
With the CARES Act, the government is supposed to provide $50 billion in aid to airlines. A couple of conditions of this include airlines adhering to the following through September 30, 2020:
- Not involuntarily furloughing any employees
- Maintaining service to all commercial airports that are currently served
Essentially the government will largely be taking over the payroll for airlines so that jobs aren’t lost in the airline industry. The expectation is that most airline employees will be working less than in the past, and will typically be paid for minimum hours, but at least no one will be involuntarily let go.
American Airlines’ CEO, Doug Parker, has painted this package in a positive light. As he explained:
- “Are we going to be okay? I am happy to report the answer to that question is yes.”
- “I am confident that those funds, along with our relatively high available cash position will allow us to ride through even the worst of potential future scenarios.”
United Airlines already says aid isn’t enough
And, based on how doctors expect the virus to spread and how economists expect the global economy to react, we expect demand to remain suppressed for months after that, possibly into next year. We will continue to plan for the worst and hope for a faster recovery but no matter what happens, taking care of each of our people will remain our number one priority. That means being honest, fair and upfront with you: if the recovery is as slow as we fear, it means our airline and our workforce will have to be smaller than it is today.
This isn’t exactly an optimistic outlook from United, and it kind of makes you wonder about this government aid.
Based on United’s perspective, this government relief package won’t actually help the airline recover, but rather will allow them to simply push off layoffs until October 2020…
Meanwhile according to Parker at American, the whole point of this package is so that people could remain employed, so that the industry could get moving again as soon as it’s safe.
Frankly United executives probably have a more realistic take on the situation, but…
What do you make of United’s stance on this?
(Tip of the hat to View from the Wing)