Just like hockey, the aviation industry is a draw for many-many reasons, but ultimately everyone loves the fights. In a world without travel, there are more to come.
There’s just nothing like dropping the gloves and saying “let’s go”, and in the first labor positive move in decades, American Airlines CEO Doug Parker appears to have fired the first shot across the bow of United Airlines, stating that the airline can’t simply turn full time employees into part time.
In a call to labor management and outside teams, American Airlines CEO Doug Parker offered an interesting quip regarding long time frenemy Scott Kirby, incoming CEO of United.
The remark came at an awkward time, and perhaps wasn’t meant to be picked up by Forbes (whoops), but in response to United Airlines plans to make full time staff part time, Parker effectively said that United is “gaming” the payroll protection and bailout stipulations. Worse, the gaming will have an extremely negative impact on United’s workforce. Parker stated…
“Some airlines think it is OK to go and cut employees’ hours..
“One [airline] is cutting full-time from 40 hours to 30, a 25% cut in pay, I was there when we were working on CARES and that wasn’t the intent or meaning of it.
And that is not just for union employees – it is for non-union, too. We disagree with [United’s] position, and if anyone asks, we will let them know we disagree with their position.”
Virtually every global airline will face staffing issues in the next few months, with dwindling demand unlikely to reach the record breaking heights of 2019 for many years to come.
But after US government bailouts in the double digits of billions and other props to the US airline industry, laying off key employees in their greatest time of need, or significantly reducing pay seems opportunistic, at best.
United accepted over $3 billion through CARES grants to NOT lay off workers, but found a loophole in the program which will allow the airline to effectively do so, while greatly reduce costs. Essentially, the airline can just offer employees “less” work, which allows the airline to maintain the bailout stipulation that it not reduce pay rates, while effectively reducing pay rates.
Of course, United will keep the money.
Adding insult to perhaps literal injury – ala Dr. Dao – United has re-written severance policies to create more instances where there’s none whatsoever. The airline plans to fire 30% of its workforce in the days immediately following government payroll protection limits, so that’s fairly handy.
You could throw stones, but then again, American Airlines used bailout money to announce a $150 per bag fee for international itineraries.
It’s all a tad ironic for United. The airline historically found any and all loopholes to extract value from its loyalty programs so abhorrent, it trained employees to “shut them down”, so to then use a loophole to wiggle out of decency in employment during a crisis is rich.
To reiterate American Airline CEO’ Doug Parker’s main point: he was in the room when these legislative actions for airline support were put into place by government decree, and this was not the intention of the bills passed. For an airline CEO in the US to speak out against another airline in the very close, loosely competitive tribe is almost unheard of.
It’s hard times for airline employees everywhere, but particularly at United, where even the CEO of a competing airline in a largely non competitive airline market takes a shot at leadership. When Scott Kirby takes over as CEO of United on May 20th, he’ll have plenty to address.