“United Airlines would be cutting 15,000 airport staff and baggage handlers’ hours from 40 to 30 a week, converting them from full- to part-time status. The announcement came after a grim earnings report showing the company had suffered a net loss of $1.7 billion in the first quarter of this year.
United has also received $5 billion from the U.S. Treasury through the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s Payroll Support Program, including a $3.5 billion grant and another $1.5 billion loan. The company has also applied for another federal loan made possible by the CARES Act. “
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“The CARES Act overall included $50 billion in support, split evenly between loans and grants, for passenger airlines. A condition of accepting this federal support—and indeed the stated purpose of this support—was that the airlines retain staff at the same pay rates.The quickly passed law, however, does not specify anything about minimum hours or income, allowing airlines to cut hours while still ostensibly complying with the letter of the law.”
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“The cuts initiated by United are also a good example of the contradictory conditions placed on airline bailout funds. These companies were required to not furlough staff during a time of near-zero demand for air travel. At the same time, the CARES Act also requires these airlines to keep performing a minimum number of flights to destinations they served prior to March 1, 2020. The Department of Transportation is responsible for setting these minimum service requirements.
The result has been airlines burning fuel and cash putting nearly empty planes in the air just so they can access federal support.”