CHICAGO (Reuters) – Before U.S. airlines resume share buybacks, they should invest in their workers and fix their operational issues, aviation unions said on Thursday while launching a public campaign against the practice.
As part of the federal COVID-19 relief package, airlines have been prohibited from buying back their shares. The ban, however, is set to expire on Sept. 30.
“Now is not the time to start sending cash to Wall Street when the airlines can’t yet meet public demand or manage effectively through operational challenges,” the unions wrote on the “No Stock Buybacks” campaign’s website. The unions represent hundreds of thousands of industry workers, including pilots, flight attendants and customer service agents.
After two years of the pandemic-induced slump, air travel demand has roared back, helping the industry post its strongest earnings in three years.
But persistent staffing gaps have made it tougher for carriers to keep up with demand, marring summer travel. Flight cancellations and delays by U.S. airlines in the first seven months of the year have surpassed the comparable 2019 period, according to data from flight-tracking website FlightAware.
To ensure a smooth operation, airlines have been forced to cut flights and make costly staffing adjustments. Delta Air Line, for example, has decided to keep its capacity for the rest of the year at the levels it operated in June.
The campaign against buybacks also comes at a time when major carriers are negotiating new contracts for their pilots, who are asking for higher pay and improvements in schedules.
“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, president of the Association of Flight Attendants-CWA, said in a statement.
From 2014 through 2019, American Airlines (NASDAQ:AAL) spent over $12 billion in share repurchases. Similarly, Delta returned $15.3 billion to shareholders via dividends and stock buybacks.
Major carriers have not yet spelt out their plans to resume share repurchases once the ban is lifted.