Aviation parts of the CARES act

S

shutdown

Well-Known Member
If you don't have a lot of flights to follow and want some light source material reading that's only 30 pages instead of 850...
Pulled from https://www.congress.gov/116/bills/hr748/BILLS-116hr748enr.pdf
Grants on page 23 (page 217 of the full act) - with a 10 day past enactment (enacted 3/27 so 4/6?) deadline for when initial payroll assistance payments should be made for approved requests.
Loan information starts on page 6 (page 189 of the full act)
Suspension of certain taxes on page 14 (page 197 of the full act)
Oversight on page 15 (page 202 of the full act)
Definitions from 49 USC 40102 on page 28 (from https://www.govinfo.gov/content/pkg...btitleVII-partA-subparti-chap401-sec40102.pdf)
 

Attachments

I thought the media said this was 1000 plus pages. I’ve yet to find a copy that is that long. Are they reading it at 72 font?
 
Proposed requirements for the continuation of service have been posted at Regulations.gov (in the PDF order to show cause).
For non-regional passenger airlines:
If a city was served at least once a day five times a week, then it must still be served at least once a day five times a week. If a city was served less than five days a week, it must receive one flight a week. Flights can be to any combination of the previously serviced cities, and run through September 30, 2020.
Cities served and number of flights were counted from the week February 23-29, 2020 and full year 2019.
Regionals just have to do what their mainline partner says.
No requirements for cargo.
 
Final requirements have been posted And the final order has been posted, with modifications in response to comments: Regulations.gov
Carriers can choose to use a winter or summer seasonal schedule and if already cancelled service was included in a former seasonal schedule, service must still be maintained.
Passenger carriers with greater than 10% domestic industry capacity (AA/DL/WN/UA?):
City served more than 25x a week -> maintain 5x a week
5x to 25x a week -> maintain 3x a week
Less than 5x -> maintain 1x a week
Less than 10% domestic industry capacity:
City served at least 5x a week -> maintain 3x a week
Less than 5x -> maintain 1x a week

Clarification that cancels for mx/wx/crew won't cause noncompliance.
 
shutdown said:
Final requirements have been posted And the final order has been posted, with modifications in response to comments: Regulations.gov
Carriers can choose to use a winter or summer seasonal schedule and if already cancelled service was included in a former seasonal schedule, service must still be maintained.
Passenger carriers with greater than 10% domestic industry capacity (AA/DL/WN/UA?):
City served more than 25x a week -> maintain 5x a week
5x to 25x a week -> maintain 3x a week
Less than 5x -> maintain 1x a week
Less than 10% domestic industry capacity:
City served at least 5x a week -> maintain 3x a week
Less than 5x -> maintain 1x a week

Clarification that cancels for mx/wx/crew won't cause noncompliance.
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I suspect the Spring Thunderstorms will help with the ability to save money on flights (especially those serviced just a couple times a week with 4 pax on board).
 
Was reading tonight that anything under $100 million to airlines comes with no strings attached. I can't imagine that any regional is paying $100 million in 6 months for salaries, so guess the regionals got lucky, assuming they get enough.
 
paincorp said:
Was reading tonight that anything under $100 million to airlines comes with no strings attached. I can't imagine that any regional is paying $100 million in 6 months for salaries, so guess the regionals got lucky, assuming they get enough.
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home.treasury.gov

Treasury Announces Payroll Support to Aid Employees of Small Passenger Air Carriers

WASHINGTON – Today, U.S. Treasury Secretary Steven T. Mnuchin announced certain details of the Payroll Support Program under the CARES Act. Title IV of the CARES Act provides payroll support for American workers employed by passenger air carriers, cargo air carriers, and related contractors...
home.treasury.gov home.treasury.gov
Treasury will not require passenger air carriers that will receive $100 million of payroll assistance or less to provide financial instruments as appropriate compensation. As such, for passenger air carriers with payroll support payments up to $100 million, funds will be available promptly upon approval of their applications.
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Treasury is currently working with twelve passenger air carriers whose allocated payments would be expected to exceed $100 million to secure appropriate financial instruments to compensate taxpayers.
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www.reuters.com

Exclusive: Treasury wants warrants, repayment from major U.S. airlines on 30% of grant money - sources

U.S. Treasury Secretary Steven Mnuchin told major airlines on Friday he wants them to repay some of the $25 billion in cash grants the U.S. Congress approved last month to cover payroll costs as airlines weather an unprecedented crisis due to the coronavirus, three industry officials briefed on...
www.reuters.com www.reuters.com
Mnuchin spoke with the chief executives of major airlines in separate calls on Friday and told them the department was offering 70% of the aid in grants that would not need to be repaid, and 30% in low-interest loans for which the airlines would be required to offer warrants, the sources said. The interest rates would rise over time if airlines had not repaid them, the sources said.

Three people briefed on the matter said the warrants, which would give the government the right to buy equity at a pre-set price and time, would be equal to 10% of the value of the loan.
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shutdown said:
So far requests for exemptions from the service obligation have come in from:
JetBlue Regulations.gov
Spirit Regulations.gov
Hawaiian Regulations.gov
Frontier Regulations.gov
Delta Regulations.gov
Click to expand...

Alaska Regulations.gov
United Regulations.gov
Allegiant Regulations.gov

Linked in the other thread, but figure I might as well here too:
From 'This will lead to airline bankruptcies' — flight attendant union furious with Treasury bailout offers turning the grants into partially not-grants-but-loans seems to be a stipulation not all airlines are happy with:
The leadership teams of airlines have spent much of the weekend discussing whether or not to take the grants. “It’s starting to not be worth it,” a senior airline executive told CNBC when asked if they would accept the cash grant. “I could see airlines just laying people off because it’s cheaper.”
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Per CNN, the big four are all taking money with the agreement no layoffs until 30SEP.

Mnuchin said the department is "is also working to review and approve applications for smaller passenger air carriers as quickly as possible"
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AA: $5.8B, $1.7B of that is a loan. They're apparently applying for an extra $4.75B on top of that. Make of that what you will.
WN: $3.2B, $1B of that is a loan.

Terms:
  • No involuntary furloughs or reductions in pay rates through September 30
  • No share buybacks or dividends until September 30, 2021
  • Limits on executive pay until March 24, 2022
  • Continue service to existing cities, with certain exemptions
 
“By accepting these funds, we have happily agreed to not involuntarily furlough or reduce the hourly pay rates of our U.S.-based team members through Sept. 30, at which point we hope and expect that Americans are regularly flying again,” American’s CEO, Doug Parker, and the airline’s president, Robert Isom, wrote to employees announcing its deal with the Treasury Department.

This is the first time I've seen an airline specifically refer to "hourly pay rates" as opposed to "pay rates and benefits" (which is the actual wording in the CARES act.) My interpretation of this is that AA views involuntarily reducing hours as still complying with the stipulations of the agreement. Good luck paying your bills on 1 hour of your hourly pay rate each week. I hope that this loophole doesn't end up holding water, or that I am being overly cynical of the airline's intent.

Source: US airlines, Treasury Department reach agreements on billions in coronavirus aid
 
I'm still not sure who is worse, Dougie or Kirby.

Didn't the act require them to still abide by labor contracts? So min hours for in flight, but we should still see normal hours, yes?
 
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Green12324 said:
This is the first time I've seen an airline specifically refer to "hourly pay rates" as opposed to "pay rates and benefits" (which is the actual wording in the CARES act.) My interpretation of this is that AA views involuntarily reducing hours as still complying with the stipulations of the agreement. Good luck paying your bills on 1 hour of your hourly pay rate each week.
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At AA WO. Technically my pay will be reduced in May, since most of our lines are about 30 hr block for min guarantee of 72 hrs of pay and 21-26 days off. Half the list will be sitting reserve, I imagine OT will be nonexistent. So in essence, there will be less pay compared to the historical earnings.
 
paincorp said:
I'm still not sure who is worse, Dougie or Kirby.

Didn't the act require them to still abide by labor contracts? So min hours for in flight, but we should still see normal hours, yes?
Click to expand...

The communication from my union has been that any reduction in pay/hours would be to be approved by the membership.

At AA WO. Technically my pay will be reduced in May, since most of our lines are about 30 hr block for min guarantee of 72 hrs of pay and 21-26 days off. Half the list will be sitting reserve, I imagine OT will be nonexistent. So in essence, there will be less pay compared to the historical earnings.
Click to expand...

My understanding of the grant money was that it would be based on the payroll from the same time period last year. Airlines were definitely paying out a lot overtime and way above minimum guarantees for pilots/flight attendants last year, so one would hope that would be reflected in the amount of grants offered. With that being said, there isn't any explicit protection for those types of pay in the CARES act. Considering the way the Treasury has raided the grants portion I think it would be an uphill battle to get anything more than what the CBAs guarantee at this point. As the full details of the grant/loan agreements come out there will be a lot of work ahead for union leadership, and I am grateful for all that they are doing to protect our interests.
 
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paincorp said:
Was reading tonight that anything under $100 million to airlines comes with no strings attached. I can't imagine that any regional is paying $100 million in 6 months for salaries, so guess the regionals got lucky, assuming they get enough.
Click to expand...

When DL was running full bore with their 5500+ daily flights their daily operating expense was over $100M a day...
 
Green12324 said:
“By accepting these funds, we have happily agreed to not involuntarily furlough or reduce the hourly pay rates of our U.S.-based team members through Sept. 30, at which point we hope and expect that Americans are regularly flying again,” American’s CEO, Doug Parker, and the airline’s president, Robert Isom, wrote to employees announcing its deal with the Treasury Department.

This is the first time I've seen an airline specifically refer to "hourly pay rates" as opposed to "pay rates and benefits" (which is the actual wording in the CARES act.) My interpretation of this is that AA views involuntarily reducing hours as still complying with the stipulations of the agreement. Good luck paying your bills on 1 hour of your hourly pay rate each week. I hope that this loophole doesn't end up holding water, or that I am being overly cynical of the airline's intent.

Source: US airlines, Treasury Department reach agreements on billions in coronavirus aid
Click to expand...

I had the same thoughts
 
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