Some airlines are cutting employee hours in what critics are
calling a workaround of commitments they have made in accepting federal
Under the Cares Act, the Treasury Department is providing
carriers with a combined $25 billion in payroll grants and low-interest loans,
but under the stipulation that airlines not lay off, furlough or reduce pay for
employees through Sept 30.
Some airlines, however, have interpreted hour cuts to not be
the equivalent of pay cuts.
United has implemented hour reductions for tens of thousands
of employees, president Scott Kirby said during the carrier’s earnings call on
The carrier will receive $3.5 billion in Cares Act grants
plus $1.5 billion in 10-year loans at 2% interest.
Kirby said the federal aid doesn’t cover the $6.5 billion in
payroll expenses United could incur through September. He characterized the cut
in working hours as compliant with the bill.
“We made a promise to our people and to American taxpayers
to avoid involuntary furloughs or cuts to pay rates for U.S. employees until
the end of September, and that’s a promise we’ll keep,” Kirby said.
Delta, which will receive $5.4 billion through the Cares
Act, had reduced all ground employees to three or four days through June.
“Consistent with the requirements of the Cares Act, Delta
employees continue to be paid at the same rate of pay,” the carrier said in an
JetBlue is having employees in the corporate office as well
as specified operational managers and supervisors take 24 days of unpaid time
through September. The program doesn’t apply to pilots, cabin crew, the
maintenance team or airport ground workers such as gate agents and ramp
personnel. JetBlue said the $936 million it is to receive in federal payroll
support only covers 76% of its payroll cost though September, based upon 2019
“We are taking actions now that will help us preserve jobs
when the payroll support funding ends,” the carrier said.
The maneuvers of United, Delta and JetBlue have drawn the
ire of the carriers International Association of Machinists and Aerospace
The union says all three carriers have “ignored or
circumvented the employment protections contained in the Cares Act.”
Some in Congress agree.
In a letter Friday to United CEO Oscar Munoz, Sen. Josh
Hawley (R-Mo.) said that cut in hours is a pay cut.
“Decisions by major employers like United Airlines can
reverberate widely across the labor market, affecting communities and working
families alike,” Hawley wrote. “The taxpayers of this country have offered a
generous bailout to your company and you should, in turn, honor this trust by
keeping the promises you made to those you employ.”
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