A United Airlines flight crew walks through the terminal at San Francisco International Airport on April 12, 2020 in San Francisco, California.
Justin Sullivan | Getty Images
The largest US airlines are make money Again. The unions don’t want them spending it on stock buybacks.
A condition of the $54 billion in federal aid airlines received to pay workers during the Covid pandemic prohibited carriers from buying back stock. This ban is in effect until September 30.
But in a campaign and public petition launched on Thursday, some of the biggest airline unions – representing more than 170,000 pilots, flight attendants, customer service agents and other industry staff – are urging carriers to stabilize their operations and to invest in workers before spending to buy back up their own stock.
“We cannot allow executives to send a dime to Wall Street before they resolve operational issues and conclude contract negotiations that will ensure salaries and benefits will retain and attract people to aviation jobs” , said Sara Nelson, international president of the Association of Flight Attendants. which represents some 50,000 cabin crew members, said Thursday in a statement announcing the anti-buyout campaign.
The campaign is also supported by the Association of Professional Flight Attendants, the Air Line Pilots Associations, the International Association of Machinists and Aerospace Workers, the International Brotherhood of Teamsters, the Transport Workers Union of America and the Communications Workers. of America.
“Our highest financial priorities right now are to repair our balance sheet and invest in our employees and customers,” United said in a statement. The carrier is in the process of renewing its fleet with nearly 300 aircraft scheduled for delivery in the coming years.
Southwest declined to comment, and American and Delta did not immediately respond.
Many workers represented by the unions who are campaigning against a resumption of takeovers are in contract negotiations with their carriers. Along with a pay rise, unions are pushing airlines to adopt more predictable schedules after last-minute air travel chaos upended customer and staff plans.
Flight delays and cancellation rates have increased this year after airlines faced staff shortages that exacerbated routine problems such as bad weather. “Every dollar spent on stock buybacks is a dollar that could have been used to reduce disruption by addressing understaffing, high turnover, excessive overtime and low starting salaries,” said Richard Honeycutt, president of CWA’s Passenger Service Airline Council.
Unions pushed lawmakers for the aid package at the start of the pandemic in 2020, after initial opposition in Congress, some of which was rooted in pre-pandemic airline stock buybacks. “No blank industry rescue plan,” Sen. Richard Blumenthal, D-Conn, said at the time.
Despite an increase in bookings, rising costs, including fuel and labor, have weighed on U.S. carriers’ results and their stock prices are lagging the broader market.
Those challenges could make it difficult for airlines to resume buybacks or dividends, which are also banned until September 30, under the relief package.
“Given the economic uncertainty and perhaps even operations that have not yet fully returned to pre-COVID levels, we do not expect any to initiate dividends or buybacks this year,” he said. said Savanthi Syth, airline analyst at Raymond James.
She estimated that the earliest airline recovery would be mid-2023, with Alaska Airlines and Southwest are the most likely candidates among US carriers.
The NYSE Arca Airline Index, which primarily tracks carriers in North America, is down about 21% so far this year, about twice as much as the S&P500.
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