United Airlines CEO Scott Kirby is ramping up pressure for an extension to the Payroll Support Program by personally lobbying senior members of the White House and Congress. Will he succeed in a helping to secure a second bailout?
CEO Kirby: United Will Survive With Or Without Second Bailout
In a video message to employees seen by Live and Let’s Fly, Kirby lays out his plan of attack concerning a second bailout to keep airline workers employed through the end of March 2021.
After thanking labor unions for working hard to drum up support for the proposed six-month extension of the Payroll Support Program, Kirby mentions the only way to avoid layoffs in October will be if Congress passes and the President signs an extension of payroll support:
“And what’s clear now is that the coronavirus crisis is still with us and is not going to end anytime soon. And so, the only way that we’re going to avoid the involuntary furloughs on October 1st, at this point, is an extension of the Payroll Support Program.”
But Kirby also admits that this additional subsidy from U.S. taxpayers will not impact the survivability of United.
“To be clear, United has taken the difficult steps to make sure that we can survive, regardless of what happens with legislation in Washington, D.C. We’ve raised $16 billion of capital. We’ve cut all of our expenses to the bone. But unfortunately, we’ve also been pretty accurate about what’s going to happen with demand. And we’ve been worried that the coronavirus was going to cause a larger dip in demand than a lot of others thought. That’s why we matched our schedule to demand and flew less than some others.
“But it’s been, unfortunately, accurate that the coronavirus has had a bigger impact.And it’s increasingly clear now to us that we’re not going to get back to anything close to normal until a vaccine is not only available, but is effective, it’s manufactured, and it’s widely distributed to the entire population.
“We have positioned United to survive but what that means is, unfortunately, we’re going to have to be a much smaller airline during that. And that’s the reason we sent out 36,000 WARN notices. But there is a better answer.”
That better answer is, of course, an extension of the Payroll Support Program.
Kirby: I Am Personally Lobbying White House Officials And Members Of Congress
Noting the growing bipartisan support for the airline extension, Kirby tries to makes the broader economic argument for additional relief:
“And it’s not just about jobs. It is about jobs but it’s also about preserving critical links for the economy, keeping the economy connected, and being able to bounce back when the vaccine is here and the economy is ready to come roaring back at full speed.”
He then notes that he as well as Chairman Oscar Munoz and President Brett Hart are actively lobbying for the bill.
“Oscar, Brett, and myself are all actively engaged in Washington, D.C. in lobbying for this bill. I have personally talked to Treasury Secretary Mnuchin, White House Chief of Staff Meadows, and numerous senators and congressmen and women to express our support and to express how important it is for jobs and for the U.S. economy.”
Most analysts believes Treasury Secretary Steven Mnuchin is the lynchpin in this debate. While Republicans in the Senate are caving to re-election concerns, Mnuchin is seen as the last stopgap in pouring in another $25 billion into the U.S. airline industry (an issue we discussed yesterday on Live and Let’s Fly)
> Read More: Republicans Embrace Another Bailout For U.S. Airlines
Kirby then requests all employees to email their Congressional representatives calling on them to pass a bill with more support for airlines.
CONCLSUION
I am not privy to the interpersonal dynamics of the relationship between Kirby and Mnuchin, but the fact that direct conversations are taking place and President Trump, also fighting for re-election, has already expressed support for more airline assistance, leads me to predict the only open question will be the terms and amount, not the additional support.
image: United
Bull$$hit. So many people in this country who now have NO income, NO health insurance, ++ Facing eviction are so much more important than this news.
Didn’t the airlines just get $billion of dollars ??…. why is our government again paying airlines to retain their staff — staff that has little or no work to do? If you have 30-40% of your planes, flights operating, why are you holding onto 100% of your employees? To do what, stand around and look at one another? Wow, I’d like a job that I can go do, get paid for 40 hours and work (at best) ten of those hours. If I was really clever, I’d milk it, fake it and basically do nothing for the 8 of the 10 hours. Good grief, this is ridiculous.
Truth is, their hours have been cut across the board. No one is making their full salary from top to bottom. Some unskilled positions have been eliminated. But skilled positions that the airline has invested multiple thousands per individual for training are at risk. It’s a cheaper and faster recovery to keep them than rehire and retrain. There really is no gravy train.
I was a little surprised the last time I was at the airport talking to co-workers. I am opposed to another bailout. I think we need to learn to live in reality even if that means most of us lose our jobs or our company goes out of business. The surprising part was that every airline co-worker I talked to about the rumors of a new bailout agreed with me. Most were from LAX, but I talked to a couple from ORD and DEN, as well. I received the notice from United asking me to email Congress. I don’t think the email I sent was quite what Kirby had in mind.