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Union Reps On Airline Boards, Buying Old Planes, Limits On Fees: The Strings Democrats Couldn’t Add To Aviation’s Coronavirus Stimulus Plan

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Despite having strong balance sheets, U.S. airlines will receive federal aid under the coronavirus stimulus plan with relatively few strings attached. There are curbs on executive pay and a moratorium on dividends and stock buybacks.

Those are relatively insignificant, especially compared to the appropriations Democrats wanted to add to ensure greater worker protection, passenger rights, and a more efficient aviation industry.

Some measures are drafted not to be implemented but so they can be bartered off in negotiations. Still, the measures, a sample below, provide an alternative view of what U.S. aviation could be and how it could produce greater benefits.

Union reps on airline boards: Perhaps most radical, and least likely, was that airlines must have a union representative on their board if they accept grant or loans. The proposal called for at least one board seat to be held by a union representative for employees, but did not specify how that one person could be chosen amongst an airline’s numerous unions. This could have been most contentious at American Airlines, where employees have been calling for a new CEO.

Such representation is rare for airlines, but there is one notable exception. Lufthansa has numerous employee representatives owing to German law.

Cash for old planes: DOT would have been allocated $1 billion to buy old aircraft from airlines that pledged to replace them with newer, more fuel-efficient aircraft. But airlines already have an economic imperative to be fuel efficient. Unless DOT was going to pay above residual values, why should DOT buy an older plane when an airline could retire it on the commercial market? Would this have rewarded airlines like Delta that have been slow to modernize their fleets?

Price gouging and change fees during emergencies: Airlines would have been prohibited from making any “unreasonable increase” in ticket cost, or charging change or cancellation fees, during a disaster or emergency.

Cash refund or a one-year voucher: In disaster or emergency situations, airlines would have to let a passenger choose a cash refund or a voucher valid for at least a year. United Airlines is making some passengers wait up to a year before receiving a cash refund.

Establish Office of Airline Industry Financial Oversight: Under DOT, the office would annually asses “the financial fitness” of passenger airlines using three stress test scenarios and prescribe minimum capital requirements. This would “ensure that no air carrier would be reasonably likely to become insolvent as the result of a substantial reduction in demand for air travel following the occurrence of a terror attack, pandemic, or other national or global event that reduces economic activity.” 


U.S. airlines are being criticized for using years of record profits on stock buybacks and issuing dividends. In the case of American Airlines, it did this while significantly increasing debt.

Ancillary disclosure: Airlines would have been required to disclose, on a quarterly base, over 12 categories of fees, including for onboard internet or carrying a pet on a plane. Disclosure and regulation of these fees has been a long-running discussion in government with airlines reluctant to release the information on top of their already vast monthly operating disclosures.

Over $2 billion to develop sustainable aviation fuels: The FAA and DOT would fund research to develop and commercialize sustainable aviation fuels to reduce U.S. aviation greenhouse gas emissions while creating new jobs. Airlines are buying small quantities of biofuel that, before the crash in oil prices, were already almost twice the price of regular oil.

Domestic offsets in 2025: Airlines would be required to fully offset their annual carbon emissions from domestic flights beginning in 2025. JetBlue planned to offset all domestic flight emissions from this July. Outside of the U.S., Air France this year started offsetting all emissions of domestic flights in France (a much smaller domestic market than the U.S.).

There are arguments against offsetting. Short-term implementation gives no realistic step change in operation, meaning airlines or passengers will have to pay to offset. While offsetting has benefits, it is not seen as an end solution since it does not reduce emissions – it only transfers responsibility of the emissions.

50% emission reduction by 2050: The aviation sector’s domestic emissions would need, by 2035, to be reduced by 25% compared to 2019 levels. By 2050, emissions would have to be down 50% on 2019 levels. This would require a step change in technology beyond biofuels that does not yet exist and for which there is not adequate funding.

Emission transparency to passengers: Starting in 2023, airlines would have to clearly disclose to passengers the estimated emissions of their flight considering aircraft and routing. This would have to be stated on the first webpage of flight results after a passenger does a search. There was no requirement that airlines give passengers the option to offset the emissions.

$15 hour minimum wage: Full- and part-time employees would have to be paid a minimum of $15 an hour starting January 1, 2021. This would have been for all companies, not just in aviation, receiving aid. The minimum wage would be permanent.

Maintaining length of service: Employees rejoining after any furlough must not be considered as having a break in service. The proposal was anchored around benefits incurred based on length or service. There was no explicit stipulation seniority also be preserved.

Medical care: There was an extensive proposal to provision, for five years, health insurance benefits at or greater than the Department of Labor’s health and welfare fringe benefit rate. This would have applied not just to airlines but their contractors and subcontractors, including catering employees.

The plan also called for paid medical leave for employees experiencing or tending to a dependent diagnosed with COVID-19, having COVID-19 symptoms, or are under quarantine.

National Aviation Preparedness Plan: The stimulus would have tasked DOT to finally make a National Aviation Preparedness Plan, which the Government Accountability Office suggested in 2015. Government agencies agreed on the need but could not decide which agency would be in charge.

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