Airline CEOs made a desperate, urgent appeal to Congress on Saturday, offering concessions in the way they do business in exchange for $29 billion in cash grants as part of a $58 billion bailout for the industry.
But it appears Congressional leaders will only approve a bailout if the entire cost comes in the form of loans.
The CEOs of Alaska, Atlas, American Airlines, Delta Air Lines, FedEx, Hawaiian, JetBlue, Southwest, United Airlines and UPS sent a letter to Congress via its trade group, Airlines for America, promising to eliminate stock buybacks and paying dividends to shareholders. The caveats were part of a 'strings attached' deal for the bailout.
"If loans and or loan guarantees are enacted, equaling at least $29 billion, participating passenger and cargo air carriers commit to placing limits on executive compensation; eliminating stock buybacks over the life of the loans and eliminating stock dividends for the life of the loans," the CEOs said in the letter.
They added that time is of the essence.
"The breadth and immediacy of the need to act cannot be overstated," they wrote to Congressional leaders. "It is urgent and unprecedented."
But it doesn't appear they will get their request to have half the bailout in grants that do not have to be paid back. Reuters reported late Saturday that Congress appears to be against that plan.
Senator John Thune, the Senate's No. 2 Republican, said "at this point, I don't sense support for it here or with the administration. But like I said, nothing is done."
Airlines have drastically cut capacity and several, including Delta and United, are working off lines of credit. The CEOs also asked Congress "not to pursue opportunistic measures that will hurt, not help our ability to recover. Reuters noted that the initial Republican plan said the U.S. Treasury could demand stock, warrants or options as part of any airline loans, not to mention those who have called for a reduction-if not outright elimination-of such things as ancillary fees.
The president of the Association of Flight Attendants, Sara Nelson, said that under the Republican plan "airlines and airports will cut jobs, and the debt they'll take on will lead to bankruptcies that will further hurt frontline aviation workers while executives get a free pass."
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