Home > News > Airline unions urge carriers not to resume buybacks

Airline unions urge carriers not to resume buybacks

Date: August 18, 2022

By Leslie Josephs, CNBC

The largest U.S. airlines are making money again. Labor unions don’t want them to spend it on stock buybacks.

A condition of the $54 billion in federal aid that airlines received to pay workers during the Covid pandemic prohibited carriers from share buybacks. That ban is in effect through Sept. 30.

But in a campaign and public petition that launched Thursday, some of the largest airline labor unions — representing more than 170,000 pilots, flight attendants, customer service agents and other industry staff — are urging carriers to stabilize operations and invest in workers before spending on buying back their own stock.

“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,” Sara Nelson, international president of the Association of Flight Attendants, which represents some 50,000 cabin crew members, said in a release announcing the anti-buyback campaign Thursday.

The campaign is also supported by the Association of Professional Flight Attendants, Air Line Pilots Associations, International Association of Machinists and Aerospace Workers, the International Brotherhood of Teamsters and the Communications Workers of America.

The four biggest U.S. carriers — DeltaUnitedAmerican and Southwest — spent about $40 billion buying back their companies’ stock between 2015 and early 2020, according to S&P Global.

None of the four airlines responded immediately to CNBC’s request for comment.

Many of the workers represented by the unions advocating against a resumption of buybacks are in contract negotiations with their carriers. In addition to higher pay, unions are pushing airlines for more predictable schedules after last-minute airline travel chaos roiled plans for customers and staff alike.

Flight delays and cancellation rates rose this year after airlines struggled with staffing shortages that exacerbated routine problems such as bad weather. “Every dollar that goes toward stock buybacks is a dollar that could have been used to reduce disruption by addressing understaffing, high turnover, excess overtime, and low starting wages,” said Richard Honeycutt, chair of CWA’s Passenger Service Airline Council.

Labor unions pushed lawmakers for the aid package early in the pandemic in 2020, after initial opposition in Congress, some of which was rooted in airlines’ share buybacks before the pandemic. “No blank check industry bailouts,” Sen. Richard Blumenthal, D-Conn., said at the time.

Despite a surge in bookings, a jump in costs including fuel and labor have taken a bite out of U.S. carriers’ bottom lines and their stock prices are trailing the broader market.

The NYSE Arca Airline Index, which mostly tracks carriers in North America, is down about 21% so far this year, around twice as much as the S&P 500.

Share this page:

More News