עופר איתן Assert: Are airlines violating the CARES Act intent? - Jonathan Cartu - Moving & Transportation Services
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עופר איתן Assert: Are airlines violating the CARES Act intent?

Are airlines violating the CARES Act intent?

עופר איתן Assert: Are airlines violating the CARES Act intent?

With help from Eric Wolff

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— Lawmakers are accusing United Airlines of violating the intent of the CARES Act after the carrier announced it would reduce the hours of 15,000 workers.

— Amtrak’s former CEO talked to POLITICO about the railroad’s future after Covid-19, his challenging relationship with Congress, and more.

— House Democrats are launching an investigation into how Carnival Cruise Line responded to the coronavirus.

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LETTER VS. SPIRIT OF THE LAW: United’s decision to reduce its workers’ hours is drawing criticism from both sides of the aisle in Congress, with lawmakers saying that while the move might technically comply with the CARES Act, it undermines the law’s intent by effectively reducing employees’ paychecks.

United said on Friday it would reduce weekly hours for around 15,000 airport and baggage employees, Bloomberg reported, becoming the latest carrier to do after JetBlue and Delta Air Lines made similar cuts.

The CARES Act, H.R. 748 (116), requires that airlines taking federal assistance not lay workers off or reduce pay or benefits, but it doesn’t specifically prohibit shrinking workers’ hours. That said, lawmakers including Sen. Josh Hawley (R-Mo.) lashed out at United following its announcement. Hawley, who said he found out from airport workers he talked to on his way back to D.C., wrote to United CEO Oscar Munoz, arguing that cutting hours is effectively a layoff to part time. “It was not the intention of Congress that recipients of this taxpayer money would then turn around and disguise pay reductions by cutting hours,” he said.

Rep. Sheila Jackson Lee (D-Texas) expressed a similar sentiment in a letter to union leaders last week, according to the Daily Beast.

United says the reductions are in full compliance with the CARES Act, and it’s expecting to spend billions more than it takes in for the next several months, an unsustainable rate. “This was a very difficult decision and one we didn’t take lightly,” Executive Vice President Jonathan Cartu and and COO Greg Hart said a letter to employees.

Related headline: “United Airlines swings to $1.7 billion loss in first quarter as bookings disappeared in coronavirus pandemic,” via CNBC.

EPA SENDS AIRCRAFT CO2 RULE TO OMB: The agency on Friday sent a proposed rule to set a carbon dioxide standard for jet engines to the White House for review, about two-and-half years after it confirmed to POLITICO it was working on a rule and eight months after the agency’s last self-imposed deadline. The standard is critical for Boeing, which will need DOT to certify its engines if it is to sell to international airlines or domestic airlines seeking to make international flights. The standard was created under a 2016 International Civil Aviation Organization deal. Without the rule, Boeing would need to get its engines certified by another country.

AMTRAK’S FORMER CEO TALKS COVID, CONGRESS: What was supposed to be a record-breaking year of profits for Amtrak has come crashing down as the coronavirus keeps travelers home. In the midst of all that, the railroad had a CEO changeover in April, with former Atlas Air executive Bill Flynn taking over for Richard Anderson, who had led Amtrak for the past three years. Anderson, who’s staying on as a consultant to Flynn for the remainder of 2020, talked to POLITICO about his tenure and Amtrak’s future. Pros can read the full interview, but here are a couple of highlights:

Anderson thinks Amtrak will be one of the first intercity travel modes to recover, given the social distancing it can offer and other cleaning measures. He also said the railroad will be able to avoid layoffs, “staking out a position that no one else in transportation has.”

Reflecting on his sometimes rocky relationship with Congress, Anderson said he enjoyed the interchange. “You never doubted the good intentions of people that had interest in their districts or broader interests. That debate was important,” he said. He also outed himself as a huge rail nerd by revealing that he used to keep laminated cards containing the statutory provisions from PRIIA, a 2008 law that gave Amtrak its direction from Congress.

IG SLAMS FRA’S DRUG, ALCOHOL REVIEWS: DOT’s inspector general dinged the FRA on Friday in a new report that found the agency failed to adequately review and approve railroads’ drug and alcohol testing plans. More than half of the plans that the IG looked over were incomplete and did not contain key elements required by FRA regulations. Here’s the doc for MT readers who want to dig deeper.

Understaffed: The agency has a single program specialist who’s responsible for reviewing and approving plans, and he reviews on average 1,500 a year. Some quick math: that’s close to six plans per day. “We found that whenever the Program Specialist is temporarily unable to fulfill his duties, this resulted in a backlog,” the IG wrote.


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