March 19, 2020
The swiftly developing COVID-19 pandemic has caused a rapid increase in airline passenger cancellations, while also producing a severe decline in future bookings. To date, most airlines have responded with capacity cuts and flight cancellations. The airlines have both collectively and individually expressed immense concern about the industry’s economic health to the US government, and requested a substantial financial assistance package to help navigate through this difficult time. The White House has indicated support, with the President vowing to “back the airlines 100 percent,” and the task of negotiating a package is now with the Legislative Branch.
As Congress contemplates how to structure any potential bailout, AMFA’s Legislative Affairs team has been carefully monitoring the situation and providing input to both the House and the Senate. Our concerns, which have been communicated to Congress, involve how the airlines utilize any federal government funding coming their way. We believe that the focus of spending should be on maintaining the current workforce and ensuring that any negative impact on our members is as minimal as possible, rather than writing the airlines a blank check to use on potential stock buybacks or executive compensation packages. Towards this vein, AMFA proposed the following spending requirements on recipients of any federal credit:
- Prohibition on using federal funds for the salaries, benefits, and severance packages of the airline industry executives;
- Prohibition on federal credit recipients from using funds to purchase company shares in a corporate stock buyback;
- Prohibition on federal credit recipients from using funds to pay shareholder dividends;
- Priority to the employee, recipient of federal credit should be required to first pay the salaries and benefits of employees;
- Furloughed employees of federal credit recipients are to remain on employee health care;
- Furloughed employees of federal credit recipients will have furloughed time count toward years of service for retirement; and
- Prohibition on using federal credit for maintenance work performed at foreign based maintenance repair and overhaul facilities
Although AMFA currently supports expeditious proceedings towards a financial package for the airline industry, we are withholding our support on the actual package until Congress has finished negotiating and we have reviewed it thoroughly. We will continue to stay engaged with a laser focus on our craft as this situation quickly evolves.
Legislative Affairs Director