Airlines already violating the CARES act?

We'll put aside the fact that airlines that have been reducing hours have legal teams that have been mulling over the CARES act since it came out, I have a feeling that it's going to turn out that hour reduction is legal and does not break the terms of the grants.

Anyways... the airlines have their balls in a vice currently. Cash flow in is down 90%, they are forced to give refunds to customers instead of vouchers, overhead cost is still the same as it was before. There's just no money for it all, they've already accelerated retirement of older airframes, parked the airframes that don't need to be flying, petitioned minimum routes, suspended dividends, cut regional flying, suspended hiring, offering VLOs/LOAs, and most executives are not taking a salary. There's only one other place that they can be cutting a massive overhead cost.... all of these employees that all of a sudden have nothing to do. No board in the world would approve securing additional loans, going further into debt just to keep people on the payroll who have nothing to do just to lay them off in three months, it doesn't make sense.

I think saying that the first option was hour/workforce reduction is wildly inaccurate, airlines are doing everything they can do limit cashburn and it's just not cutting peoples hours.
 
If I’m an hourly wage earner and make 40$ an hour and work 40 hours a week and you cut my hours down to 30 hours a week, you are still cutting my pay involuntarily.

Where I’m at they did secure additional funding (our board apparently did approve it so there is at least one in the world).

If you feel good about how Kirby/Munoz are honoring the deal they made for your tax dollars that’s your right to feel that way. I don’t agree with it. You take-y grant money = you no take-y jerbs or pay until after September.

You and I do not agree and that’s ok. It’s not like we can do anything about it anyway. I just feel bad for the peeps at UA getting the shaft.
 
Eskhobbs said:
We'll put aside the fact that airlines that have been reducing hours have legal teams that have been mulling over the CARES act since it came out, I have a feeling that it's going to turn out that hour reduction is legal and does not break the terms of the grants.

Anyways... the airlines have their balls in a vice currently. Cash flow in is down 90%, they are forced to give refunds to customers instead of vouchers, overhead cost is still the same as it was before. There's just no money for it all, they've already accelerated retirement of older airframes, parked the airframes that don't need to be flying, petitioned minimum routes, suspended dividends, cut regional flying, suspended hiring, offering VLOs/LOAs, and most executives are not taking a salary. There's only one other place that they can be cutting a massive overhead cost.... all of these employees that all of a sudden have nothing to do. No board in the world would approve securing additional loans, going further into debt just to keep people on the payroll who have nothing to do just to lay them off in three months, it doesn't make sense.

I think saying that the first option was hour/workforce reduction is wildly inaccurate, airlines are doing everything they can do limit cashburn and it's just not cutting peoples hours.
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Thank you for understanding how businesses work. It’s refreshing.
 
CF34-3B1 said:
Honestly I don’t care what the cost to keep an employee is. They knew the stipulations they agreed to. If they take money that the government gives them under specific circumstances and then try to weasel their way around it then they are in the wrong and should have to face strict consequences.

Let’s not forget, the government has no $$ to give. That’s your tax dollars and my tax dollars they are handing out to try to give companies time to weather the storm. AND, those tax dollars don’t even exist yet. It’ll take generations to even possibly make a dent in the debt. Is it worth it for us all to have a chance at keeping our jerbs? I think so. But not if they are going to be shade trees and d*ck over their employees now while they have money designated for paying them.
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Weasel around? You may interpret the act as it was written?
If you want to blame someone— blame those morons in Congress
 
CF34-3B1 said:
If I’m an hourly wage earner and make 40$ an hour and work 40 hours a week and you cut my hours down to 30 hours a week, you are still cutting my pay involuntarily.

Where I’m at they did secure additional funding (our board apparently did approve it so there is at least one in the world).

If you feel good about how Kirby/Munoz are honoring the deal they made for your tax dollars that’s your right to feel that way. I don’t agree with it. You take-y grant money = you no take-y jerbs or pay until after September.

You and I do not agree and that’s ok. It’s not like we can do anything about it anyway. I just feel bad for the peeps at UA getting the shaft.
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Trust me, I feel bad for these folks too. I'm not happy about what airlines are having to do to limit the hemorrhaging of cash but I understand why they are doing it. My SO is a apart of the group that had her hours reduced by 25% and I'm looking at the very real possibility that I'm going to get laidoff here shortly. It sucks, it really does but I can't be mad at a company for doing what they have to do to keep the lights on. I'm just hoping is that the reduction of hours is enough of a cost cutting measure(among others) that they keep these people around post September 30th.

Solar Bear said:
It's so nice to see people have a conversation as opposed to APC where they immediately just insult each other lol
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As much as I loathe that site, I'm glad the children have a place to fling their • at each other and that it's not here.
 
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Eskhobbs said:
Not sure I understand this whole "corporate greed" or airlines "making a buck" view some folks have when it comes to workforce reductions. What, are they supposed to keep everyone on the payroll without anything to do and bleed money until bankruptcy? It sucks and I feel for those who are out of a job now because of it but at the end of the day these companies are just trying to stay afloat.

Be pissed about CEO salaries, stock buybacks or excessive corporate spending but nothing could prepare the airline industry for the effects of COVID19 and the financial stress it would put on airlines.
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What happened to the record profits they claimed to have made? Why don't they use that money to pay airline employees? You think they will care about the regular guy working in the SOC? Or a ramp agent? The executive or corporate greed, whatever you want to call it, is so bad in this country that people are so blinded. Yeah save your job now but wait til after September and ask were that Cares Act money went and their last few years of profit. The regular Joe Shmo has to save for a rainy day isn't it time these corporations do the same?!?!
 
What are the terms of the airline agreement(s)? Is it like the PPP small business appropriation, where if the company meets the terms for the specified time period the money becomes a grant, and if they fail to meet terms it becomes a loan that must be paid back?

If so, it’s a self-correcting problem so why get worked up about it?
 
nyk said:
What happened to the record profits they claimed to have made? Why don't they use that money to pay airline employees? You think they will care about the regular guy working in the SOC? Or a ramp agent? The executive or corporate greed, whatever you want to call it, is so bad in this country that people are so blinded. Yeah save your job now but wait til after September and ask were that Cares Act money went and their last few years of profit. The regular Joe Shmo has to save for a rainy day isn't it time these corporations do the same?!?!
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The profits were reinvested back into the business... buying new airframes, hiring more employees, opening new routes and in the cases such as Delta or SWA some of the profits were given directly to the employees. You act like it doesn't cost money to run an airline, COVID19 has highlighted just how much money an airline will burn though in a day(over 70mil a DAY for AA). There's saving for a rainy day and going through another Katrina.

Corporate greed, give me a break. :rolleyes:
 
Solar Bear said:
It's so nice to see people have a conversation as opposed to APC where they immediately just insult each other lol
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Jeez, I don’t frequent that forum and went over to take a look. I’m sure we’ve all dealt with egotistical • bag pilots, but I need a drink to put up with them battling against each other like that. Damn.
 
Eskhobbs said:
The profits were reinvested back into the business... buying new airframes, hiring more employees, opening new routes and in the cases such as Delta or SWA some of the profits were given directly to the employees. You act like it doesn't cost money to run an airline, COVID19 has highlighted just how much money an airline will burn though in a day(over 70mil a DAY for AA). There's saving for a rainy day and going through another Katrina.

Corporate greed, give me a break. :rolleyes:
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No they weren't. The profits were used to buy back shares to increase the value of the company. You act like these ceos are not at fault for the situation they are in. Did they save money for a rainy day like we're all told to do? Nah. They spent all their funds and are now crying poor to the government. If they learned one thing from the great recession, it's that they can take all the risks they want because the government will bail them out.

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Eskhobbs said:
The profits were reinvested back into the business... buying new airframes, hiring more employees, opening new routes and in the cases such as Delta or SWA some of the profits were given directly to the employees. You act like it doesn't cost money to run an airline, COVID19 has highlighted just how much money an airline will burn though in a day(over 70mil a DAY for AA). There's saving for a rainy day and going through another Katrina.

Corporate greed, give me a break. :rolleyes:
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The basic principal is to have 3-6 months of operations in savings, I'm not even sure they had one month. To add to it they have a lot of debt, especially AA. Would saving that amount of money mean they have a smaller airline with less routes and less aircraft? Would they be less competitive? Yes, but it also means they probably could've handled the current situation with little disruption and far less people being furlough, positioning them for the most success when everything recovers. It's not like this was some unforeseen thing either (the virus was, the economic impact not so much). The airlines have had to go through 9/11 and the 2008 banking crisis, so it's not like they didn't know that a situation could come up that would drastically affect them and they should be prepared when/if it does. It's purely short sighted greed that got them here.

If Joe Blow doesn't save extra money to have an emergency fund and simultaneously racks up credit card debt, auto debt, etc, he's considered irresponsible for not being prepared for the current situation. The same is true for any local small business, if they don't have money saved to weather a storm for 3-6 months they are irresponsible and nobody feels bad when they go out of business. How is an airline any different? Why can they get away with not having any savings but we can't? That's what is being asked.

I'm thankful we got the CARES Act, it does help a lot of people and is probably saving entire companies. The idea that airlines aren't to blame here and are just completely innocent victims is ridiculous though.
 
Eskhobbs said:
The profits were reinvested back into the business... buying new airframes, hiring more employees, opening new routes and in the cases such as Delta or SWA some of the profits were given directly to the employees. You act like it doesn't cost money to run an airline, COVID19 has highlighted just how much money an airline will burn though in a day(over 70mil a DAY for AA). There's saving for a rainy day and going through another Katrina.

Corporate greed, give me a break. :rolleyes:
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This is absolutely not true. United alone spent 77% of their own profit on stock buy backs over the last ten years. And just to refresh your memory. Stock buybacks are a form of stock manipulation and were illegal until 1982.

Don’t get me wrong- it’s unrealistic to think any airline can pay 100% of employee salaries while operating at 10%. But don’t let them fool you- they don’t have to operate at 100% to pay their employees. They need to operate at 100% to enrich their shareholders and executives and that is always the priority of corporations. They won’t be cutting employees and salaries to “keep the lights on” they will be doing it to return to profitably for their shareholders.
 
I know there’s a real possibility that I’ll get furloughed sometime this fall. And I understand that if that is what it takes to keep the airline alive so I have a great job to go back to in a few years, its a necessary pain.

But not until AFTER September as agreed upon.

I’m not one of those “don’t know how business works” “big corporations are bad” “they owe me everything types” But I am one of those “you hold your end of the deal and take responsibility for your actions types” I don’t think any business, small or large, should be exempt from that.
 
CF34-3B1 said:
I know there’s a real possibility that I’ll get furloughed sometime this fall. And I understand that if that is what it takes to keep the airline alive so I have a great job to go back to in a few years, its a necessary pain.

But not until AFTER September as agreed upon.

I’m not one of those “don’t know how business works” “big corporations are bad” “they owe me everything types” But I am one of those “you hold your end of the deal and take responsibility for your actions types” I don’t think any business, small or large, should be exempt from that.
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Aren’t you at the airline with over a full year of liquidity if demand stays at 5% the entire time? And that’s not including the government loan they probably won’t take? If you get furloughed in the fall it won’t be until the fall of 2021.
 
It's interesting to me how Delta did the same thing as United was planning to their airport employees, but it's been almost a month and it gets very little attention. United on the other hand has already walked this back over the course of a weekend. Say what you want about IAM normally, but they stepped up here.

I guess management/admin folks will be stuck with their reduction, however. The same as JetBlue.
 
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