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Bailout Grant Strings Are Too Much

Old 03-31-2020, 12:06 PM
  #1  
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Default Bailout Grant Strings Are Too Much

I appreciate the House of Representatives for pushing to add grants in addition to the loans provided by the senate. However, after looking at all the strings attached to the grants, I wonder if many airlines will choose to skip the grants all together (which unfortunately means employee furloughs before October 1). Here are just some of the onerous strings that are attached to taking the grant money.

The grants are only equal to 6 months of payroll, and airlines are handcuffed from cutting pay or furloughing anyone during that time. That means that we are not getting a dime to help out with all the other major expenses (Aircraft payments, landing fees, maintenance, rent, fuel (if the load factor doesn't cover the cost), etc... That is unsustainable with no revenue. Like it or not, airlines would be way better off financially if they were able to lay off surplus employees while demand is way down, and use grant money to handle other expenses that cannot go down. I'm not saying I want to get furloughed, but I also want to have a solvent airline to come back to.

The treasury department is requesting that airlines maintain a minimum level of service, which is well above what airlines would normally be flying. Yesterday, 154,000 passengers passed through TSA. This day last year, it was 2.36 million. So passenger traffic is down almost 95%.https://www.tsa.gov/coronavirus/passenger-throughput . That is why airplanes are flying around so empty. This is also unsustainable.

Senators are now requesting that airlines issue full cash refunds to passengers who hold airline tickets rather than issuing them a credit to be used later.
https://www.reuters.com/article/us-h...-idUSKBN21I2UU

The Treasury Department has also stated that they plan to take equity stakes in any airlines that accept the grant money. What does that mean for us going forward?

I hope all airlines are looking real closely at these strings, and honestly I see several major airlines NOT taking the grant money.
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Old 03-31-2020, 12:26 PM
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Originally Posted by iahflyr View Post
I appreciate the House of Representatives for pushing to add grants in addition to the loans provided by the senate. However, after looking at all the strings attached to the grants, I wonder if many airlines will choose to skip the grants all together (which unfortunately means employee furloughs before October 1). Here are just some of the onerous strings that are attached to taking the grant money.

The grants are only equal to 6 months of payroll, and airlines are handcuffed from cutting pay or furloughing anyone during that time. That means that we are not getting a dime to help out with all the other major expenses (Aircraft payments, landing fees, maintenance, rent, fuel (if the load factor doesn't cover the cost), etc... That is unsustainable with no revenue. Like it or not, airlines would be way better off financially if they were able to lay off surplus employees while demand is way down, and use grant money to handle other expenses that cannot go down. I'm not saying I want to get furloughed, but I also want to have a solvent airline to come back to.

The treasury department is requesting that airlines maintain a minimum level of service, which is well above what airlines would normally be flying. Yesterday, 154,000 passengers passed through TSA. This day last year, it was 2.36 million. So passenger traffic is down almost 95%.https://www.tsa.gov/coronavirus/passenger-throughput . That is why airplanes are flying around so empty. This is also unsustainable.

Senators are now requesting that airlines issue full cash refunds to passengers who hold airline tickets rather than issuing them a credit to be used later.
https://www.reuters.com/article/us-h...-idUSKBN21I2UU

The Treasury Department has also stated that they plan to take equity stakes in any airlines that accept the grant money. What does that mean for us going forward?

I hope all airlines are looking real closely at these strings, and honestly I see several major airlines NOT taking the grant money.
All this depends what airline you work for. If your airline already has a bunch of cash, take the grants, keep people on payroll, be prepared to capture market on the backside. If your airline already was in a bad place when this happened, take the grants, lay off a ton of people in 6 months, and then restructure. Most everyone will take the grants IMO, maybe SWA wont because they have so much $, but I bet they grab it also.
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Old 03-31-2020, 01:07 PM
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Originally Posted by BangDingOw View Post
All this depends what airline you work for. If your airline already has a bunch of cash, take the grants, keep people on payroll, be prepared to capture market on the backside. If your airline already was in a bad place when this happened, take the grants, lay off a ton of people in 6 months, and then restructure. Most everyone will take the grants IMO, maybe SWA wont because they have so much $, but I bet they grab it also.


cash on hand not credit, here it is

delta 2.8 B
american 631 million
united 6B
alaska 670m
jetblue 829 m
SWA 3.8 B
Hawaiian 373m
allegiant 122 m
spirit 979 m

And yes I know they can bleed through very fast
facts only look it up
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Old 03-31-2020, 02:20 PM
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Originally Posted by Sniper66 View Post
cash on hand not credit, here it is

delta 2.8 B
american 631 million
united 6B
alaska 670m
jetblue 829 m
SWA 3.8 B
Hawaiian 373m
allegiant 122 m
spirit 979 m

And yes I know they can bleed through very fast
facts only look it up
Credit-worthiness matters in this context too. Big time. That will be influenced by perceptions, so those with international exposure may not have as much access to credit.
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Old 03-31-2020, 04:34 PM
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Take the grant money, shut down the airline for 6 months while still paying employees, then start back up.

I know it isn't that easy, but I wish it was.
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Old 03-31-2020, 04:57 PM
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Originally Posted by Flyby1206 View Post
Take the grant money, shut down the airline for 6 months while still paying employees, then start back up.

I know it isn't that easy, but I wish it was.
Apparently that's not going to be allowed.

There's news reports coming out saying that the airlines will be required to provide a certain amount of service in order to get the grant money
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Old 03-31-2020, 05:04 PM
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Originally Posted by Aero1900 View Post
Apparently that's not going to be allowed.

There's news reports coming out saying that the airlines will be required to provide a certain amount of service in order to get the grant money
This is the section they are reading. It is open ended since it isn't required, but could be required by the Secretary.

(1) IN GENERAL.—The Secretary of Transpor
tation is authorized to require, to the extent reason
able and practicable, an air carrier provided finan
cial assistance under this subtitle to maintain sched
uled air transportation service, as the Secretary of
Transportation deems necessary, to ensure services
to any point served by that carrier before March 1,
2020.
(2) REQUIRED CONSIDERATIONS.—When con
sidering whether to exercise the authority provided
by this section, the Secretary of Transportation shall
take into consideration the air transportation needs
of small and remote communities and the need to
maintain well-functioning health care supply chains,
including medical devices and supplies, and pharma
ceutical supply chains.
(3) SUNSET.—The authority provided under
this subsection shall terminate on March 1, 2022,
and any requirements issued by the Secretary of
Transportation under this subsection shall cease to
apply after that date.
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Old 03-31-2020, 05:20 PM
  #8  
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No such thing as a free lunch
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Old 03-31-2020, 05:26 PM
  #9  
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Originally Posted by iahflyr View Post
I appreciate the House of Representatives for pushing to add grants in addition to the loans provided by the senate. However, after looking at all the strings attached to the grants, I wonder if many airlines will choose to skip the grants all together (which unfortunately means employee furloughs before October 1). Here are just some of the onerous strings that are attached to taking the grant money.

The grants are only equal to 6 months of payroll, and airlines are handcuffed from cutting pay or furloughing anyone during that time. That means that we are not getting a dime to help out with all the other major expenses (Aircraft payments, landing fees, maintenance, rent, fuel (if the load factor doesn't cover the cost), etc... That is unsustainable with no revenue. Like it or not, airlines would be way better off financially if they were able to lay off surplus employees while demand is way down, and use grant money to handle other expenses that cannot go down. I'm not saying I want to get furloughed, but I also want to have a solvent airline to come back to.

The treasury department is requesting that airlines maintain a minimum level of service, which is well above what airlines would normally be flying. Yesterday, 154,000 passengers passed through TSA. This day last year, it was 2.36 million. So passenger traffic is down almost 95%.https://www.tsa.gov/coronavirus/passenger-throughput . That is why airplanes are flying around so empty. This is also unsustainable.

Senators are now requesting that airlines issue full cash refunds to passengers who hold airline tickets rather than issuing them a credit to be used later.
https://www.reuters.com/article/us-h...-idUSKBN21I2UU

The Treasury Department has also stated that they plan to take equity stakes in any airlines that accept the grant money. What does that mean for us going forward?

I hope all airlines are looking real closely at these strings, and honestly I see several major airlines NOT taking the grant money.
Negative. The equity stake is for the LOANS, not the grants. No equity stake for taking the grants. Very important distinction.
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Old 03-31-2020, 05:32 PM
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This is way welfare sucks, no matter how much free money you give someone they still ***** about it.
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