It was an intelligent investment that helped both the U.S. economy and ensured flight availability this summer.
The programs known as PSP (for Payroll Support Programs) were a landmark achievement for airline labor. The legislation was drafted by unions, who then advocated for it. Sara Nelson, a flight attendant leader, became a television icon while others worked to engage Congress.
However, most airlines failed to anticipate the summer’s demand surge and didn’t manage to do a good job. Congress also was unable to work well, creating a gap between the two tranches of support for airlines. Layoffs were encouraged by the gap between late summer and early fall. Combined with unfavorable summer conditions, these factors led to cancellations, delays, and long waits for reservations.
Ed Bastian, Delta CEO, stated Wednesday on the carrier’s July earnings call that “volumes of reservations are beyond anything ever seen.” American also canceled extended, voluntary leave for 3,300 flight attendants.
Ed Bastian, Delta CEO, stated Wednesday on the carrier’s July earnings call that “volumes of reservations are beyond anything ever seen.” American also canceled extended, voluntary leave for 3,300 flight attendants.
Friday’s letter was written by Sen. Maria Cantwell (D-Wash.), the chairwoman of the Senate panel that monitors the airline industry. She asked six CEOS why there were staff shortages despite receiving cash infusions. She wrote to Southwest, Allegiant, and American CEOs.
Cantwell wrote that “this reported workforce shortage is contrary to the objective of the PSP which was to allow airlines to endure the pandemic, and keep employees on the payroll so that industry was positioned for a rebound in demand.” Although it was only an inquiry, it was very pointed.
Leaders of airline unions are reminding PSP was a huge success. Sito Pantoja (an International Association of Machinists general Vice President who led the union’s transportation section for nine years) stated that PSP “kept 90% of members employed with a salary check, health insurance and continuous contributions to retirement plans.”
Pantoja stated that it also gave airlines the ability to get ready for business as soon as possible. Imagine if all those employees had been furloughed. Where would they be today?
Pantoja stated that all these airports, all those businesses, and all these small stores are flourishing. “Everybody knows that the economy is affected by the movements of airlines.
IAM’s Transport Division and the Transport Workers Union represent the largest unions of airline workers. Their legislative staff worked closely with legislators: Pantoja met both American President Robert Isom and United CEO Scott Kirby.
In March, Congress allocated $25 billion for commercial airlines employees and another $14 billion in December.
Some airlines made the decision to either lay off workers or purchase them outright during the gap in allocations. Nelson stated that they couldn’t keep their payroll in place because of financial constraints.
Nelson stated that “We warned Congress that if Congress didn’t renew it last Oct, we wouldn’t be in our job.” “One of our key components of the payroll support program was the understanding that employees with clearances and credentials cannot simply show up at work the next day. They must be kept qualified. It takes time to get them back on the job.
Nelson stated that “what you see now is the hangover of the lapse in funding in Congress.” It’s confirmation that PSP does work. Imagine if there was no funding, and people would be upset at the pulldown of 1%-22% in flights.
John Samuelsen, president and CEO of the Transport Workers Union, lamented “the idea that the money didn’t do what was supposed to.” Southwest sent warning layoffs to workers in the financing gap, but it didn’t have to, while American or United laid-off workers. American and United later called workers back and gave retroactive pay.
New York’s 46,000 TWU members worked as subway and bus workers. Samuelsen stated that PSP had many benefits and that tens of thousands of public transit workers were not laid off. Imagine how dire the economy would look if the entire transportation industry collapsed.
Why didn’t United CEO Scott Kirby speak with Cantwell?
Todd Insler was the chairman of the United chapter of Air Line Pilots Association. He stated, “PSP has been immensely successful for both the U.S. economy and for workers, particularly at United where our operational performance helps millions of our passengers return pre-pandemic travel levels.”
Insler stated that the program was most effective at United because of a unique agreement made with pilots. This prevented layoffs. Insler noted that this “enabled” United to maintain all types of United aircraft flying through the pandemic. It also saved thousands of jobs and kept our pilots current. “United pilots could (could] return to flying quickly to meet demand and not have to deal with the problems other people are having.”
American and Southwest, on the other hand, flew more of their regular schedules but were often caught by bad weather or crew shortages.
Dennis Tajer, spokesperson for the Allied Pilots Association, which represents 15,000 American pilots, stated that “the operational failures we see” are not attributable to PSP. American fired 1,600 pilots during the funding slump. Tajer said, “We told management that this was a risky strategy.” It takes months to train a pilot backup.
He said that “PSP was an extraordinary success.” Without it, the airline industry could have collapsed. It would have been about selling assets by airlines.
