Airlineonce again puts its hand in its pocket for the third rescue mission of Pandemic
Gary Leff at 10. March 2021.
Congress has approved the U.S. bailout package, which provides $14 billion for commercial airlines and requires them to pay $14 billion by September 30 to avoid laying off workers.
- Previous bailouts include $50 billion in CARES ($25 billion in wage support and $25 billion in subsidized credit) and the suspension of the national excise tax on air travel for 2020, and another $15 billion in December 2020.
- This brings the total of subsidies to commercial airlines to $79 billion, excluding funds awarded to airports, airline contractors and cargo carriers.
Under the terms of the PSP2 wage subsidy, the airlines could not employ their employees until 1. April rejected. This requires airlines to keep employees on the payroll for an additional six months. You can hire employees from 1. October Dismissed if flights do not recover to use the services of all employees remaining with the airline (and if there is no fourth life jacket).
Most of the money goes directly to the airlines, not to the cost of sending employees on leave without pay. It covers salary costs incurred anyway, with or without grants.
- Under the current compensation system, for example, American Airlines received $3 billion in wages over four months, but reported that full compensation for previously laid-off workers was worth only $100 million per month. That means they made $2.5 billion with the PSP2, and we can expect them to make almost as much with the third version. In fact, even more so because not as many workers went on vacation in April as the airlines laid off in the fall. The numbers for United Airlines are about the same.
- During this time, neither Southwest nor Delta took unpaid leave. Southwest pledged after the last round of subsidies that they would not lay anyone off by 2021, but we are giving them billions more to not lay anyone off until December.
- Delta even pays big bonuses to management while they get salary supplements.
In the fall, J.P. Morgan told investors that a second round of grants was expected and that a third round was possible, and that they should take that into account in their evaluation of Aviation Stone.
The Americans have even found a way to avoid paying the fired workers. Of course, current and former employees of eligible airlines will also receive an immediate payment of $1,400.
The Air Force’s strategy of letting unions have their say in the Democratic Congress was brilliant. They managed to get the union leaders to insist on these bailouts, while only a small portion of the money was spent on the workers.
You probably didn’t buy your tickets during the pandemic, but the airlines took your money anyway. Remember when the three major airlines lobbied aggressively to make government subsidies unacceptable? That was only 18 months ago.
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