The Charging Bull on Wall Street, NYC. (Photo Courtesy of Lauren Bowman)
As a stipulation of the $50 billion federal government grants and loans package for airlines two years ago at the worst of the COVID-19 pandemic, carriers agreed not to buy back its own stock to invest more in its own company and employees.
The moratorium on that pledge is scheduled to end on September 30, 2022, however, and aviation unions are calling on airline to continue its agreement not to make any stock buybacks.
“We paused the greed in aviation for a little while with legislative constraints tied to COVID relief,” Sara Nelson, president of the Association of Flight Attendants-CWA, said in the unions’ press release according to Fox News Business. “But the greed that ran rampant before COVID created a system that was already stretched thin with minimum staffing and high overtime hours.”
Purchasing shares of your own stock strengthens the shares for stockholders. Instead, the unions want to see the airlines re-invest money back into the company – especially at a time when carriers are suffering major delays and cancellations caused in part by staffing shortages.
Most airlines offered early retirements and buyouts for employees two years ago when the pandemic hit and nearly ruined the airline industry. The offers were thought to be, at the time, another way for airlines to increase the cash flow of the government relief funds with saving monies on payroll.
But when the travel surge returned earlier this year, airlines were caught flat-footed with a lack of staff needed to serve all its passengers.
“We can’t allow executives to send one dime to Wall Street before they fix operational issues and conclude contract negotiations that will ensure pay and benefits keep and attract people to aviation jobs,” said Nelson, who has been a critic of the airlines’ stance on the relief program, known as the CARES Act, almost since the beginning two years ago.
In addition to Nelson and the Association of Flight Attendants-CWA, other unions are also onboard in calling on airlines not to return to stock buybacks after September 30, including the Air Line Pilots Association Int’l, Association of Professional Flight Attendants, Communications Workers of America, International Association of Machinists and Aerospace Workers, International Brotherhood of Teamsters, Transport Workers Union of America and Service Employees International Union.