Airlines and their labor unions are making a unified pitch to lawmakers and the administration during the coronavirus pandemic: We need financial help, and we need it now.
The message, including pushback against criticism of stock buybacks during profitable streaks, comes as Congress begins to negotiate a $1 trillion stimulus package that includes some of the industry’s asks.
“The breadth and immediacy of the need to act cannot be overstated,” the industry wrote in a letter signed by 30 business groups that include both the airlines and labor unions. “It is urgent and unprecedented.”
The two sides do not always see eye to eye. For example, American Airlines, the world’s largest carrier, was at odds with its mechanics last year during contract negotiations; the airline accused the unions of encouraging a work slowdown.
But both American CEO Doug Parker and representatives of the unions — the Transport Workers Union, and the International Association of Machinists and Aerospace Workers — wrote in a joint letter to policymakers that “governmental assistance, with appropriate conditions, is an essential component of our path to sustainability and recovery.”
The executives of several airlines have traveled to Washington for meetings. Delta CEO Ed Bastian told employees in a memo this week that the discussions were “constructive.”
The airlines have also recruited state and local officials to push for an assistance package by warning in a public letter that “our state and local economies rely heavily on commercial aviation.”
The proposal drafted by Senate Republicans includes some but not all of the industry’s requests. It does include as much as $58 billion for passenger and cargo aviation, but entirely in the form of loans — rather than half loans and half grants, as the industry group Airlines for America originally requested.
One of the issues the industry is brushing up against are past stock buybacks, which benefit investors, made by some airlines when the industry was profitable.
“One of the reasons, let’s not forget, that many airlines are so short on cash right now is that they have spent billions on stock buybacks,” Senate Minority Leader Chuck Schumer, the body’s top Democrat, said in a speech Wednesday. He said the airlines “should have been saving it for a rainy day, for their customers and workers.”
The industry group Airlines for America has responded to that criticism with figures showing it spent $48 billion on stock buybacks between 2010 and 2019, while spending $139 billion on investments including its airplane fleet.
President Donald Trump said Thursday the issue is one being discussed in the negotiations.
“I don’t want to have stock buybacks. I don’t want people spending — I don’t want some executive saying, ‘We’re going to buy 200,000 shares of stock,'” he said. “I want that money to be used for the workers. And also, for the company, to keep the company going. But not for buybacks.”