Call us toll free 1-833-801-9084
contact@lasvegascrating.com
Latest news: Las Vegas Crating Moves 6 Million dollar art sculpture at Aria
Las Vegas Crating and LogisticsLas Vegas Crating and LogisticsLas Vegas Crating and LogisticsLas Vegas Crating and Logistics
  • Home
    • Specialty Shipping Blog
  • Packing Supplies
  • Packaging
    • Vapor Barrier Bags
    • White Glove Delivery Service
  • Shipping
    • Art Packing Shipping and Storage
    • Electronic Shipping and Moving
  • Crating
    • ISPM 15 HP Heat Treated Wood Shipping Stamp
  • Moving
  • Freight-Shipping
  • Logistics
  • Clients & Partners
  • Gallery
  • Locations
    • Las Vegas Nevada
    • Miami Florida
    • Los Angeles CA
    • San Antonio Texas
  • Contact Us
    • Packing and Shipping Areas of Service

Airline Contractor Layoffs after COVID Aid

    Home Specialty Shipping Blog Airline Contractor Layoffs after COVID Aid
    NextPrevious
    air cargo covid layoffs

    Airline Contractor Layoffs after COVID Aid

    By Las Vegas Crating and Logistics | Specialty Shipping Blog | 0 comment | 23 October, 2020 | 2

    Airline Contractors Under Fire From House Committee over COVID Layoffs

    The coronavirus has significantly hurt ground handling companies because airlines heavily reduced flying in response to anemic travel demand and required fewer services. In August, Swissport agreed to a comprehensive restructuring with creditors and shareholders that included a debt-for-equity swap and a new €500 million ($592 million) long-term debt facility.

    Four aviation services companies that took $595 million in federal wage offsets as part of an emergency coronavirus stimulus package last spring have committed to retain all current employees after several were reprimanded by a House investigative committee for violating terms of the aid.

    The four ground handling agents — Menzies Aviation, DAL Global Services, Sky Chefs and Worldwide Flight Services (WFS) — employ more than 30,000 people in the U.S. Three other airport service providers — Swissport USA Inc., Flying Food Fare Inc. and Gate Gourmet — rejected requests to refrain from further layoffs until their funds are exhausted.

    The commitments follow a staff report revealing that the Treasury Department allowed aviation contractors to fire thousands of workers while still receiving and spending hundreds of millions of dollars in federal funds intended to protect jobs.

    Menzies, DAL and WFS never conducted any layoffs during the period in question and reaffirmed they intended to abide by the intent of the program. The report also praised another company, G2 Secure Staff, for acting in accordance with the spirit of the Payroll Support Program (PSP) despite permission by the Treasury Department to use loopholes.

    Rep. James Clyburn, D-S.C., chairman of the House Oversight and Reform select subcommittee on the coronavirus crisis, sent letters Oct. 9 to several ground handling companies to demand they stop further layoffs until they have spent all their funding.

    Congress created the PSP, part of the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, to preserve aviation jobs by subsidizing payrolls in exchange for companies keeping workers employed. Airlines received the lion’s share of funding — $25 billion for passenger airlines and $4 billion for cargo airlines — but lawmakers set aside $3 billion for contractors that perform catering, security, baggage and cargo handling, fueling and other services.

    “The Trump administration has let companies fire thousands of employees and still receive program funds. I am pleased that following my request, several companies have agreed to halt further layoffs and furloughs until all of the PSP funds awarded to them have been spent,” Clyburn said in a statement. “I urge other PSP recipients to take the same pledge to preserve jobs while spending taxpayer dollars. The select subcommittee will continue to demand that relief funds only be used in a manner consistent with congressional intent.”

    Four all-cargo airlines are also in Clyburn’s crosshairs for taking money intended for troubled companies when they were flush with income. He has asked the companies to return $630 million.

    The select subcommittee said the following aviation contractors laid off thousands of workers

    • Swissport USA Inc. involuntarily furloughed 3,873 workers between April 3 and July 10, when it executed its PSP agreement. Although Swissport received over $170 million in PSP funds, it did not hire back a single worker once it received aid. Swissport plans to continue spending PSP funds until March 2021.
    • Flying Food Fare Inc. laid off 1,516 employees and forced indefinite leaves for 1,521 employees between the time it submitted its PSP application and when it executed its agreement with Treasury. The company received over $85 million under the PSP but did not hire back any workers. Flying Food Fare plans to continue spending its PSP funds into the second quarter of 2021 but expects to lay off at least 125 more employees in the next six months.
    • Gate Gourmet laid off 5,040 employees between April and the execution of its PSP agreement in June. It received more than $171 million in PSP support and does not anticipate exhausting those funds until March or April 2021.
    • G2 Secure Staff acted like a good corporate citizen, the report said. It furloughed a total of 2,187 employees at 41 airport locations before it knew whether it would be eligible for the PSP. It reduced salaries for all 219 corporate staff, managers and directors, with for four senior executives taking zero pay. After the passage of the CARES Act, G2 instituted a no-furlough policy effective April 1, which the company estimates saved 3,000 jobs. Although the company was under financial pressure while waiting for Treasury to approve its application, G2 refrained from any cuts. After receiving a direct grant on June 12, G2 provided lump sum payments to all of its frontline staff to restore missed compensation based on involuntary hour or schedule reductions over the prior two months. The company also partially restored salaries for corporate staff, managers, directors and executives, although executives continue to work at reduced rates. As of August, its CEO is still not receiving a salary.

    The select subcommittee accused the Treasury Department of shoddy oversight of the PSP. Documents uncovered during its investigation show that aviation contractors sought to avoid “unnecessary costs” by terminating employees before executing PSP agreements. The report said Treasury incentivized aviation contractors to game the system.

    Treasury undermined the job-retention goals of the payroll assistance in several ways, according to the select subcommittee:

    • The CARES Act mandated the Treasury begin distributing payroll assistance within 10 days of the law’s enactment, but it took months to execute the necessary agreements. The delays led at least 15 different aviation contractors to lay off or furlough at least 16,655 employees before the agreements took effect, more than 15% of the existing aviation contractor workforce.
    • Treasury permitted layoffs up to the execution date of a PSP agreement, leading companies to “urgently” fire employees before signing agreements. Treasury knew companies were conducting layoffs while their PSP applications were pending but failed to object or require that employees be rehired. Internal emails, for example, show Swissport sought to “furlough or terminate” staff before signing the PSP agreement to avoid “unnecessary costs once the ink is on the paper.” Treasury’s inaction meant many companies paused layoffs for far shorter than the six months Congress intended. Five contractors that received PSP funds in September only paused layoffs for less than one month.
    • Treasury permitted companies to spend PSP funds without a deadline — leading many companies to stockpile the money rather than rehire laid-off workers.
    • Treasury failed to reduce the amount of financial assistance awarded despite mass layoffs, awarding companies payroll support for jobs that no longer existed. Treasury calculated the amount of assistance awarded to each company based on 2019 payroll figures. Although companies alerted Treasury to significant layoffs prior to finalizing PSP agreements, it failed to lower the amount awarded based on the reduced headcount. As a result, companies received payroll assistance for jobs they already eliminated.

    The staff report recommended Congress amend the CARES Act to prohibit layoffs by aviation contractors until all PSP funds are extended and ensure that Treasury expedites the distribution of any additional payroll support funding.

    Republicans and Democrats are deadlocked on another round of economic relief that would include targeted support for the aviation industry.

    air cargo, covid aid, layoffs, news

    Las Vegas Crating and Logistics

    More posts by Las Vegas Crating and Logistics

    Related Posts

    • Las Vegas Crating Moves Six Million Dollar Art Sculpture

      By Las Vegas Crating and Logistics | 0 comment

      Las Vegas Crating Moves Famous Henry Moore Art Sculpture From Aria In what is one of the largest undertakings of art sculptures being moved this feat was accomplished by professional and veteran packing, shipping, andRead more

    • port of los angeles night

      California Ports Halted Due To COVID Outbreak

      By Las Vegas Crating and Logistics | 0 comment

      Los Angeles / Long Beach Dockworkers hit Hard with Coronavirus Infection Rates at It’s Ports ILWU Coast Committeeman Frank Ponce De Leon told American Shipper on Thursday, “Longshore workers have been moving cargo nonstop duringRead more

    • stolen-gold-mask-artifact

      International Art Trafficking and Stolen Artifacts

      By Las Vegas Crating and Logistics | 0 comment

      Police and Customs seize over 19,000 stolen pieces of art and artifacts Two huge international police and customs operations targeting the trade in stolen artworks and archaeological artefacts have led to the arrest of 101Read more

    • covid-19-operation-warpspeed-vaccine

      Covid-19 Vaccine Transportation Logistics

      By Las Vegas Crating and Logistics | 0 comment

      Shipping and Transportation of Covid-19 Vaccine in America : Operation Warpspeed The first challenge facing the companies in charge of the transportation of the vaccines is maintaining the vaccine’s temperature. This is not easy. Why?Read more

    • cargo-container-ship-pollution

      New Shipping Pollution Control Standards

      By Las Vegas Crating and Logistics | 0 comment

      U.S. Regulators rolling out new pollution control standards Monday on ships The 329-page Vessel Incidental Discharge National Standards of Performance, issued by the U.S. Environmental Protection Agency, sets a new framework for regulating discharges “incidental toRead more

    NextPrevious

    Recent Posts

    • Las Vegas Crating Moves Six Million Dollar Art Sculpture December 1, 2021
    • California Ports Halted Due To COVID Outbreak January 27, 2021
    • International Art Trafficking and Stolen Artifacts October 29, 2020
    • Covid-19 Vaccine Transportation Logistics October 27, 2020
    • New Shipping Pollution Control Standards October 26, 2020

    Archives

    • December 2021 (1)
    • January 2021 (1)
    • October 2020 (10)
    • August 2020 (1)
    • May 2020 (2)
    • April 2020 (1)
    • August 2019 (1)
    • July 2018 (2)
    • May 2018 (1)
    • April 2018 (2)
    Las Vegas Crating and Logistics
    4610 Polaris Ave.
    Las Vegas , Nevada
    89103
    702 - 748 - 4973
    Opening Hours
    Monday 8:00 am – 5:00 pm
    Tuesday 8:00 am – 5:00 pm
    Wednesday 8:00 am – 5:00 pm
    Thursday 8:00 am – 5:00 pm
    Friday 8:00 am – 5:00 pm
    Saturday Closed
    Sunday Closed

    For After Hours Support and Operations

    Just because our walk in office is closed does not mean we are not on hand. Is it after hours or Saturday or Sunday and you need a quote ? Feel free to call and leave a message or set up a special appointment as we will be able to assist you

    contact@lasvegascrating.com

    Locations

    Las Vegas – Nevada

    Miami – Florida

    San Antonio – Texas

    Los Angeles – California

    BBB Accreditation

    lv-crating-bbb-logoBBB Accreditation Information

    Copyright 2020 Las Vegas Crating and Logistics | All Rights Reserved | Sitemap
    • Art Packing Shipping and Storage
    • Cart
    • Checkout
    • Clients & Partners
    • Contact Us
    • Crating
    • Electronic Shipping and Moving
    • Free Quote
    • Freight-Shipping
    • Gallery
    • Home
    • ISPM 15 HP Heat Treated Wood Shipping Stamp
    • Las Vegas Nevada
    • Las Vegas Raiders
    • Locations
    • Logistics
    • Los Angeles CA
    • Miami Florida
    • moving
    • My account
    • Packaging
    • Packing and Shipping Areas of Service
    • Packing Supplies
    • Ricks Restoration
    • San Antonio Texas
    • Shipping
    • Shop
    • Sitemap
    • Vapor Barrier Bags
    • White Glove Delivery Service
    Las Vegas Crating and Logistics