If passed no furloughs until 30 Sept
 

Airlines to get loans, cash-for-equity bailouts

• Struggling U.S. airlines would be eligible to receive federal loans and direct cash assistance if they are willing to give an option for an ownership stake to the government. The program allocates $25 billion to passenger carriers and $3 billion to airline contractors providing ground staff such as caterers, while cargo haulers would see $4 billion.
• The addition of direct cash relief, earmarked for payrolls, was sought by airline and industry unions, which feared massive job losses if loans were the only option. The legislation does not include emissions limits for airplanes that were sought by House Democrats, Senator Pat Toomey, a Pennsylvania Republican, said on a press call.
• Other transportation winners include rail and transit operators. Amtrak would get $1.02 billion to cover coronavirus-related revenue losses and support state-funded routes.
• Here is the controversial section on "air carrier or contractor" bailouts:

To be eligible for financial assistance under this subtitle, an air carrier or contractor shall enter into an agreement with the Secretary, or otherwise certify in such form and manner as the Secretary shall prescribe, that the air carrier or contractor shall— (1) refrain from conducting involuntary furloughs or reducing pay rates and benefits until September 30, 2020; (2) through September 30, 2021, ensure that neither the air carrier or contractor nor any affiliate of the air carrier or contractor may, in any transaction, purchase an equity security of the air carrier or contractor or the parent company of the air carrier or contractor that is listed on a national securities exchange; (3) through September 30, 2021, ensure that the air carrier or contractor shall not pay dividends, or make other capital distributions, with respect to the common stock (or equivalent interest) of the air carrier or contractor.

• No surprises here either: an aircraft company getting bailout funds will not be allowed to fire workers or cut wages, nor pursue M&A or engage in buybacks and dividends.

Is it likely the airlines will take this? The cost of keeping everyone on the payroll without cutting pay rates for 6 months, when only a small portion of your fleet is flying, and you have few passengers has to be astronomical. I guess if you thought everything was going to pick up shortly it would be worth it, but if it doesn’t, I’m wondering if this is too costly for them to accept.

Isn't that what the $25,000,000,000 is for?

I’m sure there are far more expenses and losses than just payroll. Plus they have to give the government equity and abide by other restrictions. I’m not certain the airlines will accept this, I wouldn’t put it past them to just furlough, and declare bankruptcy when they need to.

I am merely asking the question of what people think they will do. I have no idea.🙁

They will take the money. What they are getting is what they basically asked for in that letter they sent to Congress

What CEO wants to be remembered as the guy to turn down free money to pay his employees instead said **** it just put them on the street

Yep. It’s what the asked for, and basically the conditions they promised.

Still has to pass the house.

What does no reducing pay rates mean? Is it talking about actual pay rates or is it saying we’ll make the same take home pay as before regardless of not flying with parked planes? I mean that’s a good deal if true but a big taxpayer waste.

I share those thoughts and I wonder how bloated that payroll will be. I feel a second stimulus may be needed for the Everyman before it’s all done and will pull us out of the blues in time for the holidays. Curious like how Delta saying they will emerge a smaller carrier will cause some to reconsider the offer. I’d bet if one CEO balks they all will. They all seem like such followers. You say who would turn it down, but if one does they all might. I’m still optimistic that they’ll dive for cash.

Does provision 2 prevent consolidation before September 2021 or is that strictly in reference to buy backs?

I'll see you all on OCT 1st my friends.... This post will age well.

¿¿meaning??

If passed no furloughs until 30 Sept
 

Goodbye free market!

If you file bankruptcy and you don’t have a revenue stream that allows you to meet your operating expenses the term used is liquidation.

Furloughs start October 1st.

Start saving your money now. It's gonna be a LONG furlough for many of us. Worse than 9/11. Some of us are looking at 5-10 year furloughs probably.

AA would have pretty much no pilots in 10 years. Hard pass on your prediction.

10 years from now we will have gone thru another entire economic cycle.

Do you have a doomsday shelter?

Amr had decade plus furloughs after sept 11. Age 65, fuel and recession didn’t help. But yes hard to see that happening again.

Not only did age 65 “not help”, it was absolutely KEY to dragging out the furloughs of the 2000s. If there’s one thing we DO know amongst this mess, it is that at least X number of pilots will leave the property every year on a predictable schedule.

and that entire time (2001-2012) AA only retired like 3000 pilots...that many retire in the next 4 years from AA and next 5 from DL.

in 10 years there will be about 8000 pilots at DL and 6000ish at AA who are currently on their respective senority lists

I can see a ton of 60 plus guys just hanging it up. Especially with some of the deals I’ve seen. I wouldn’t want to go through the last few years of my career in this environment. Personally I’m planning on 60 but it really depends on what it looks like at that time. If it looks like this I’m out.

10 years from now I’d like to be watching from Del Boca Vista.

”We’re moving in lock, stock, and barrel. We’re gonna be in the pool, we’re gonna be in the clubhouse, we’re gonna be ALL OVER THAT SHUFFLEBOARD COURT...”

a lot of those guys who stayed out that long did it by choice. They had a good job and/or military thing going, and held onto their recall number until the last minute. Then swooped in with good seniority when THEY chose to.

Need a like button for posts like this!

https://thumbs.gfycat.com/NeatBouncyBettong-max-1mb.gif

At least 65 should be off the table

Understood. I know 2 that it was a decade till given the chance at a recall (Plus or minus a year). One was twa the other was in 727 training sept 11. Started a 3 year clock once called I believe? I wouldn’t say they had good jobs in the meantime. Relatively speaking.

totally sucks for them, and I hope we aren’t about to see a repeat.

lol is this a real question? This is America....where you walk all over your employees, cut their pay and walk away with a huge golden parachute. This has happened how many times in the airline industry?

doubt many will hang it up if they had much of their retirement in the market.

AA is scheduled to retire ~ 5,500 by 2026.. very different then post 9/11. AA also has furlough pay.. anyone on property for over a year will get severance pay.

I also think a lot will depend on how many will take the early leave. Should see some numbers late today and more results on the 30th .

you been living under a rock? There’s notjnmy free about the market. It’s rigged, plain and simple.

Furlough pay is industry standard, but so is this line in the contract:

“except that no furlough pay will be paid when furloughs are caused by an act of God, a national emergency,”

Industry standard? HaHa.. don’t think any regionals have furlough pay nor do most ULCC, LCC.

Spirit has furlough pay, and also the clause stated above.

wrong..............

Go on......

been answered

Frontier also has furlough pay with same clause.

Longevity based furlough pay plus five months of insurance, no act of God/emergency clause at SWA

force manure can always be litigated in court...