Airlines Stimulus Package Round #2

From my previous posts, by now all of you know that I work for Southwest Airlines. I am one of the lucky airline employees that have been able to keep their jobs during this pandemic (so far). Southwest Airlines has been extremely successful and was on track to continue to grow and be more successful for years to come. Many of the major airlines such as Delta, United, and American were all on track to have record profits. However, this all changed due to the unforeseen pandemic that has plagued the airline and other industries throughout the world.

We know that aviation has highs and lows. When the economy does well, people fly more often for many reasons, money being at the top of that list. Some major downs for the airlines have been September 11, and the recession in 2008. During both these downtimes, Southwest Airlines still managed to make a profit and was still able to create jobs. Other airlines were able to recover within years of these downturns with little to no furloughs.

Airlines have gone through this before right? And they have recovered? The answer is yes to both questions, but this time is different. Why is it different? This pandemic has hit the airline industry harder than ever. Up til COVID, 9/11 was the greatest financial hit in US airline history. Most airlines had rainy day funds, some (like Southwest) even had enough to cover more than the damage that an event like 9/11 could cause. The damage that COVID has costs airlines exceeded 9/11 losses in May 2020 and continues with no end in sight. Companies with billions of dollars of savings watch as their savings is drained into nothing. In the first quarter of 2020, Southwest had a net loss of $94 million, 2nd quarter $1.5 billion, and 3rd quarter results were at $1.2 billion loss. The CEO of Southwest Airlines Gary Kelly states that the airline is doing all they can to reduce costs. They have been able to reduce operating costs from $24 million per day to roughly $16 million per day, but it’s still not enough.

It is extremely expensive for an airline to operate daily. One of the top daily expenses is payroll. There is more to an airline that meets the eye. To the casual traveler, they see the ticket agent, the gate agent, a few ground control workers, the pilots, and the flight attendants. What they don’t see are the people behind the scenes. Flight dispatchers, flight followers, customer support personnel, maintenance controllers, meteorologist, planning, training of pilots and flight attendants, schedulers, customer service agents, and so many more.

So much work is done for just one flight, that it requires an army of people to accomplish all the tasks needed for a safe successful and on time flight. Imagine trying to keep 4,000 flights operating smoothly every single day. This is why the Payroll Support Program is needed so badly for airlines. It’s expensive!

Airline employees are the ones who make it possible for you to experience the world and help you fly home for weddings or funerals. They work holidays so that you can make it home for your holiday. These employees bring family and friends together from long distances and also help businesses thrive. These same employees have personal lives and are being hurt by this pandemic. Airlines are doing all they can to support them, but cutbacks are being made which in turn is bringing challenges to all airline employees. Some are getting furloughed indefinitely, but even for the ones who can keep working, many have seen their pay cut by up to half. Lost wages from holiday pay, profit sharing, and the most damaging for all employees, overtime, is not losses covered by the news. The damage hasn’t just hit aviation. The entire travel industry which makes up 10% of all jobs in the US including Hotels, airBNB’s, car rental agencies, touring companies etc. have ALL been devastated by the COVID and seen record breaking losses. Many have already lost their jobs/ business, but the rest will be gone if help isn’t given.

Small lists of airline jobs are located in this link, in case your interested.

This next part comes from the CEO of Southwest Airlines Gary Kelly:

“We are grateful for the Payroll Support Program (PSP) proceeds we received from the U.S. Treasury under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which allowed us to operate without pay cuts, layoffs, or furloughs through September 30, 2020. As the pandemic and its devastating effects on our industry continue, we urge our federal leaders to pass an economic relief package that includes a clean, six-month extension of the PSP to further protect jobs and crucial air travel to communities across the Nation. Absent this extension, we simply cannot afford to continue with the conditions required to maintain full pay and employment. Based on the lack of stimulus, we have communicated temporary pay rate reductions to our non-contract Employees and have begun negotiations with our Union Leaders to reach agreement on reasonable, temporary concessions for our union contract Employees beginning January 1, 2021, in return for no layoffs or furloughs through the end of 2021, barring unforeseen and catastrophic changes to our business. In the event that we are unable to reach agreement on temporary concessions with our Unions, we plan to—as a last resort—furlough Employees in early 2021. If the federal government extends the much-needed PSP for the airline industry, we intend to discontinue or reverse these efforts through 2021.”

Ok, so now you know where I sit with the 2nd round of the stimulus package. To be clear, it is not me being selfish or trying to protect my salary, I will manage. It is because 35,000 airline employees are now out of work, and that number WILL grow because this pandemic is not retreating. Delta and Southwest who have not furloughed yet are on the verge.

These employees that have been furloughed or who have completely lost their jobs are now trying to find new jobs, in an economy that is hindered by the pandemic. All the years, and I mean YEARS of training that those in the airline industry has had is unique, and their training might not expand into different industries. My education and training are very tailored to what I do, and I know it would be difficult for me to find a good-paying job with my skillset outside of the airline industry.

I often hear comments such as, “Airlines won’t fail, they can just adjust, and they can make things work.” And, “I do not want airlines to get anything because my taxes will go up.” Or the worst of all comments, “airlines got themselves into this.” My rebuttal to all those comments is, yes… yes they can fail, Southwest was the most financially stable of all US airlines and they ARE failing, and without help, some airlines and possibly ALL may go out of business. And those “adjustments” they speak of are MUCH harder to make in the airline industry than you think. Once one airline cuts air traffic at an airport, those landing and departure slots are gone and are hard to get back. Cutting back or making adjustments means decades of work are now gone. Also, taxes will not go up as much as you think, or if they even do it’s not because of the PSP. Airlines are expected to pay this money back. It’s not free. Taxes might go up, but it’s not the blame of the airline industry.

What we need to realize is that airlines are very essential for our economy. They do more than just connect people from A to B. They create jobs, help companies grow and move essential supplies. So why shouldn’t an industry so valuable to the economy receive any more help?

Confession time… Because of my experience being employed by an airline, I see the government helping entire industries differently than I did before. I lean more republican on a lot of things, however by saying that, I see good and bad on both sides of the political aisle. I used to judge companies that have received help, and have also said the words “I do not want my taxes to pay for this and that.” It’s so easy to judge when you are on the outside looking in. What I have learned, it that their is so much more to the story in these situations. Judging the airlines without studying out the facts, is the wrong thing to do.

Before you outright say you disagree with the airlines receiving a second PSP, make sure you educate yourselves. Make sure you consider the 700,000 airline employees struggling to make mortgage payments and the 35,000 (more to come) who have already lost their job. instead of just thinking about your pocketbook. The travel industry is dependent on people, and they cannot get people into their doors until this pandemic can be controlled, and who knows when that will happen. If the airlines do not receive the second round of PSP, more and more airline employees will lose their jobs, and when the pandemic is over or it is considered “safe” to fly (I will go into the safety aspect in a different post), you will find it harder and more expensive to fly.

Few industries are making major profits from the coronavirus, and many people have not been affected by this pandemic yet. And I say yet, because the pandemic will trickle down into your field of work, either by loss of revenue from a struggling economy or increased taxes from the MILLIONS on unemployment. And when it does, I hope that whatever line of work you are in is protected. I know you would hope for this, as it becomes real to you when it’s affecting you. I hope that your years of education, training, and work experience continues to be valued, and not thrown out the window because of a pandemic.

I respect everyone’s opinions and ideas regarding what is the best course of action for the country during this time in our world’s history. I know that we all have different opinions, and that’s a good thing. I hope that collectively we can work together to overcome this pandemic, and come out as better people on the other side of this. I ask that you consider my opinion and dive deep into this subject before you outright say no to the PSP.

Bonus… Those of you who have said you outright don’t support PSP for the airlines without any thought of what airline employees are going through… I know who you are, and those buddy passes I give out, are no longer available 😉 Have fun paying for your flights!

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