4.03.20 – American Airlines Submits Application to Receive Aid

Friday, April 3, 2020

American Airlines Submits Application to Receive Aid

Today, American Airlines submitted an application to receive aid from the U.S. Department of Treasury. Up to $12 billion in grants and loans could be available to support American Airlines. APFA commends the company’s decision to seek the employee payroll grants that were provided in the CARES Act.

These funds are ‘pass-through’ grants which means they are exclusively designated to support aviation workers. They cannot be repurposed for other expenses (restrictions were placed on stock buybacks and executive compensation) and, if any amount is left unused, the remaining money would go back to the government. This is what Congress intended when it passed the CARES Act – to directly save aviation jobs.

The grants are critical as they protect APFA members from involuntary furloughs, reduced pay, and reduced benefits for six months through September 30th, 2020. With demand for air travel at an all-time low and no idea when it can or will restart, our industry is dependent on federal aid during this crisis. Once the coronavirus is contained, the road to economic recovery may also not be immediate. With these grants, aviation will be able to hold on during these hard times and lead the recovery when it comes.

However, the last-minute provision inserted in the CARES Act by Senator Pat Toomey (R-PA) contained language that could allow the government to obtain a major stake in American Airlines in return for the support. This is a bad thing in that it has undermined the incentive for the airlines to accept these grants that keep frontline workers on the payroll.

The company anticipates further discussions with the Department of Treasury in the days ahead regarding the terms and conditions associated with the payroll grants portion of the CARES Act. We are hopeful that Secretary Mnuchin and American Airlines will reach agreeable terms that are not too onerous for either party, so that thousands of aviation workers like ourselves can navigate through the crisis.

Thank you to all Flight Attendants who took the time to contact Secretary Mnuchin’s office. This was an industry-wide effort to put workers first.

In Unity,

Allie Malis
APFA National Government Affairs Representative
[email protected]