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Fri, Sep 16, 2022

American Airline Pilots Union Condemns Airline Stock Buybacks

“Part of a Larger, Persistent Pattern of Mismanagement”

Stock buybacks are a legal but despicable means by which companies buy up their own stock for purpose of creating the appearance of demand, thereby driving up the price. Once the artificially inflated stock is in demand—and it almost always winds up so—the companies divest themselves of their shares and pocket vast profits—oftentimes into the tens-of-billions-of-dollars.

To wit.

The Allied Pilots Association (APA), which represents the 14,000 pilots of American Airlines—the world’s largest air-carrier—added its voice to the broad coalition of aviation workers opposed to stock buybacks by U.S. carriers.
APA President Capt. Edward Sicher states: “Stock buybacks don’t benefit passengers or aviation workers, they don’t enhance the reliability of air travel, and they come at a steep cost. From 2014 through 2019, major U.S. airlines spent more than $39-billion to repurchase shares, including more than $12-billion at American Airlines alone. The motivation is clear: Airline executives are among the largest shareholders, and by boosting the share price, they can greatly enrich themselves.”

“Stock buybacks represent part of a larger, persistent pattern of mismanagement by our nation’s airlines,” Capt. Sicher added. “Despite receiving $54-billion in public funds in the form of Payroll Support Program grants and loans during the COVID-19 pandemic, the airlines were nevertheless unprepared for the return of air travel demand. Lawmakers’ intentions were completely disregarded, as those funds were specifically intended to enable airlines to maintain their payrolls and be ready to fly again. Instead, our passengers and crews have been experiencing chronic delays and cancellations.

“During the pandemic, American Airlines made the ill-advised decision to furlough pilots—the only major U.S. carrier to do so,” Capt. Sicher continued. “Despite entering into an agreement with APA to keep furloughed pilots current and qualified to maximize post-pandemic operational readiness, management elected not to train pilots who volunteered to participate. We’re seeing the consequences of that shortsightedness now.”

The Air Line Pilots Association, Int’l (ALPA), the Association of Flight Attendants-CWA (AFA-CWA), the Association of Professional Flight Attendants (APFA), the Communications Workers of America (CWA), the International Association of Machinists and Aerospace Workers (IAMAW), the International Brotherhood of Teamsters (IBT), the Transport Workers Union of America (TWU), and the Service Employees International Union (SEIU) recently went public in demanding that airlines pledge to stabilize the industry with reliable operations and good jobs before any additional funds are expended on stock buybacks.

“APA strongly recommends taking that demand a step further,” Capt. Sicher concluded. “In our view, airlines need to forgo stock buybacks altogether and instead direct the funds to more constructive purposes.”

FMI: www.aa.com

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