Airline workers at major US carriers including Delta, United, and American are having their hours and pay reduced, despite provisions in the coronavirus bailout package that protect against layoffs and furloughs.
The Coronavirus Aid, Relief, and Economic Security Act, or "CARES" Act — offered $58 billion in aid to airlines, split into two parts. Up to $29 billion in loans for air carriers is available, and an additional $29 billion in payroll grants.
Those grants are intended to help workers at struggling airlines, distributed by the federal government to the the carriers, and disbursed to employees using regular payroll systems.
Both the loans and the grants mandate that companies accepting them not reduce workforces until after September 30, 2020 — in effect, the mandate prohibits involuntary job cuts.
However, airline workers are learning that despite the protections, many of them may not be earning their usual full salaries in the coming months.
Pilots and flight attendants are typically paid based on how much time they fly — with exceptions, they aren't paid full salaries for time on the ground, whether that's during boarding, or spent on waiting for an assigned flight.
With airlines cancelling flights, crew employees are unlikely to be able to get their normal number of flight hours for the coming months — a process known as bidding. For those employees, that could mean different things.
At United, flight attendants will be paid for the minimum number of monthly work hours they're entitled to receive under their union contract, a senior executive at United said on Friday. According to an official from the Association of Flight Attendants union, that means 71-78 hours at United, depending on how each flight attendant's schedule is normally structured. During a typical month, flight attendants will work 85-110 flight hours, and sometimes pick up additional trips, the union official said.
That equates to a roughly 20-35% drop in take-home pay, depending on how many hours the flight attendants normally work.
Similar hours reduction and pay cuts to match contractual minimums are expected among the airline's other employees, too.
At Delta, some employees were told their normal workweeks would be cut from five days to three or four. In a memo sent to employees on Tuesday, March 24, before the stimulus bill was passed, and seen by Business Insider, CEO Ed Bastian asked ground-based employees to take the reduction in hours.
"Given the large proportion of the fleet and schedule that we've been forced to pull down, there is substantially less work at present for our people to do," Bastian said in the memo. "With that in mind, it is our responsibility to protect Delta, and we are taking additional temporary steps to preserve cash to help us through this crisis."
In a follow-up memo sent on Friday, March 27, after the bill was signed into law, Bastian outlined that even with the bailout, cuts would still be required.
The bill "is one of several steps that we have outlined over the past two weeks designed to protect jobs and our airline," he wrote. "Those include the cash raised in the financial markets; salary reductions for officers and directors; voluntary leaves; reduction in work hours as we substantially downsize our operation; and expense reductions that come from consolidating airport facilities, closing many Delta Sky Clubs, deferring nonessential maintenance and pausing all nonessential capital projects."
"I know that a temporary reduction in work hours as we shrink the operation is difficult," Bastian added. "But at Delta we've always shared our success, and we stand together to face our challenges as well. This shared sacrifice protects everyone's jobs and helps ensure that we'll keep climbing, together, when the crisis passes and we begin our recovery."
