Treasury Department proposal could result in significant job losses and new burdens on airline employees

Washington (April 13, 2020) – Senators Edward J. Markey (D-Mass.) and Richard Blumenthal (D-Conn.), members of the Commerce, Science, and Transportation Committee, today sent a letter to the Department of the Treasury and the Department of Transportation, expressing their concerns regarding the Treasury Department’s implementation of the “Air Carrier Worker Support” section of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The CARES Act provides a total of $50 billion in emergency relief to our nation’s passenger air carriers. Congress carefully divided this aid package into two sections, with $25 billion allocated to direct payroll assistance and another $25 billion offered in loans and loan guarantees. This structure ensures that airlines can receive $25 billion in direct grants that do not have to be repaid, on the condition that the airlines use this funding to continue paying salaries and benefits for the duration of the coronavirus pandemic. However, according to recent reports, the Treasury Department is planning to require that airlines repay 30 percent of any grants they receive under the worker support section of the CARES Act, effectively converting into a loan a portion of that direct assistance for aviation employees.

“Imposing a repayment requirement on worker assistance grants could discourage airlines from accepting the aid, forcing them to cut rather than preserve jobs,” write the lawmakers in their letter to Secretary of the Treasury Steven T. Mnuchin and Secretary of Transportation Elaine L. Chao. “Furthermore, even if airlines accept relief funding with these conditions, each company’s ability to preserve its workforce will be imperiled when the Treasury Department later demands repayment, leaving employees to ultimately pay the price.”

A copy of the letter can be found HERE. 

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