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Association of Flight Attendants President on how the stimulus standstill will impact the future of the airline industry

Sara Nelson, Association of Flight Attendants President, joined The Final Round to discuss the state of stimulus talks in D.C. and how the standstill is impacting the airline industry,

Video Transcript

SEANA SMITH: Well, turning to one sector that wasn't participating in today's big rally. That, of course, is a lot of those airline names. We had Delta, United, American Airlines, all closing in the red today. And this comes as the airliners are trying to figure out what's next. A bipartisan push for more aid for the industry hit a roadblock in Congress once again. So for more on this, we want to bring in Sara Nelson. She's the President of the Association of Flight Attendants.

And Sara, it's great to have you back on the show. Last time you were on Yahoo Finance, at the end of September, you were hopeful that we were going to see some sort of deal. We're almost in the middle of October. And we still don't have any deal in sight. I'm just curious, just I guess, first, broadly speaking, just your reaction to the mixed messages that we're getting from the White House and also from just lawmakers down in DC? And then that with what you're hearing from your constituents?

SARA NELSON: Well, first of all, we are feeling complete and total whiplash. Because we have been at the center of this. And airline workers are being used as a pawn in the negotiations right now. We are the thing that everyone seems to agree on but nobody can seem to close the deal on. And so we've heard from the White House, from the Democrats, from the Republicans, everyone in between, both houses, that they all support us.

But nobody can seem to make locking in our jobs and the critical infrastructure of the airline industry a law. And so I do want to remind everyone that this is a jobs and infrastructure program. I want to thank our CEOs for joining us in this fight. But this was a union plan to keep people in their jobs, connected to their health care, during the pandemic, and to keep all of our service to all of our small communities.

It caps executive compensation and bans stock buybacks and dividends. This was not necessarily a package that the industry wanted to put together. But it's a package that we crafted. And they came along with us. And now, they see-- now they see that not only are we seeing that we are not recovering like we had hoped, we're still right in the middle of the crisis. And so as they have come along on this fight with us, they're really fighting for America.

Because if we don't get this jobs and infrastructure program locked in, they are going to have continued service cuts to communities. People are going to have to drive 8 and 10 hours to get air service. They're not going to get their mail as quickly. They're not going to have access to sell their goods. We're not going to be able to start the economy again. Because we will have to put people through long recall training.

And in the meantime, we're going to send more people to the unemployment line that is more and more becoming a bread line, and as we head towards a depression instead of an extended recession. So that's really where we are. And real people are feeling that whiplash and absolutely exacerbated with the fact that this government can't get this done.

And I talk to people who've been up here for decades, who've said that there has never been such a crazy time in Washington.

ANDY SERWER: Sara, let me ask you about the flight attendants themselves and how they're faring. I mean, does the average person not have any money left? Where does their health care stand? And what's their mood?

SARA NELSON: Well, it's fairly clear. We are talking about a furlough in seniority order. So we're talking in some cases upwards of 20 years getting furloughed. But it's mostly people who are at the lower end of the seniority list. That means that they've been making less. That means that, more likely, they've been living paycheck to paycheck, have not had a lot of time to put savings together, have not had a lot of time to have an individual cushion.

And we also have many, many stories of flight attendants saying that they worked really hard to get this job because they wanted to do it but also because they had a preexisting condition. They're young. And they've beat cancer. And if they don't have access to drugs that cost $1,000 a month, not only can they not take care of themselves, but they can't even function enough to get another job if there were one to be had.

So we're hearing stories like that all over the place. We're hearing a lot of stories about young parents. Oftentimes, you meet your spouse at work. You meet your significant other at work. And so you have two people who have been furloughed losing their health insurance and oftentimes with kids or other dependents. And these are the stories that we're hearing. So they're real people, who are really scared, who are losing their homes, who are losing their health care, who are losing any sort of future security, who are burning through their savings just to try to get by right now and don't know that they're going to be able to recover and take care of their kids for the long term.

And what that means is that they're breaking leases and they're cutting off the cable bill. And there is a ripple effect across our economy.

RICK NEWMAN: Hey, Sara, Rick Newman here. I'm sure you're aware of the scuttlebutt in Washington along the lines of, look, once the election is behind us three weeks from now, this will all be easier to accomplish. You know, it's pretty clear that both sides are posturing into the election and the Democrats probably holding out because they'd rather control the whole process if they can, if Joe Biden wins, and they can take the Senate. So how much harm is done if there isn't a bill, but it either doesn't come until sometime in November, or sometime in, let's say, late January or early February under that Democratic-sweep scenario?

SARA NELSON: Well, first of all, anyone who thinks that there's going to be a bill done after this election is absolutely in fantasyland. And so we are talking about February. And we're talking about that being a long time from now. Coronavirus cases are on the rise again. We're right in the middle of the crisis. People are out of savings. People have nowhere else to go.

We are going to have more evictions, more foreclosures. We are going to have to start to bail out the banks. And the next administration is going to be stuck with putting a relief package in place that has to do way more than what they're talking about right now. So what's the likelihood of that happening? That depends on the outcome of the election as well.

Here's the thing. Do the right thing. That's all you have to do. This is not a political assessment. This is real people. And we are Americans. And we are in the middle of a crisis. And in every other crisis time in America, we have pulled together. And we've had leadership that has pulled us together.

We are absolutely missing that leadership right now. So someone has to step up and lead.

AKIKO FUJITA: Sara, there is also that question of how much the airlines are likely to recover on the other end of this? We've had a number of guests that have come on and said, look, the airlines will eventually recover, but not to the extent that where we were pre pandemic. So even with A stimulus bill passed, I'm curious how many of those jobs we're seeing-- if we're just talking more than 33,000 who have been furloughed, how many of those jobs do you think actually can come back or can be saved?

SARA NELSON: So first of all, I want to put this in real terms about what we're really facing here. Because the numbers have not necessarily been accurate. So we had about 750,000 airline workers going into this crisis. The airlines are experiencing less than half of the demand from before and about 25% of the revenue from last year. So if you just look at the work that there is to be had there, we're talking about hundreds of thousands of people who are going to lose their jobs.

Because here's the issue. We have furloughs for October 1st. But we do not have any more prohibitions on furloughs going forward. And the airlines are going to have to right size the airlines in the midst of this economic environment, which is not the new normal. It is a consequence of the crisis. So to your question, on the other side of this, if we were to lock in this six months of prohibition on furloughs, continued payroll support, keeping people connected to their health care, and that continued service to all of our communities, we're going to get to a place where we're six months closer to a vaccine, six months closer to a testing regimen, and the ability for other sectors to start to open up, which is a reason for other people to start traveling again. And we're going to be in a much better place.

Are they going to be a smaller airlines? Absolutely. But if you look at the Great Recession, the airlines fluctuated about 15% in demand. And they were able to weather that. So there is the ability to operate at a smaller size and not have any furloughs. And that's what we want to get to here. And that's where we believe we can get to if we lock in this relief now, not only for the airlines, but for the rest of the country, so that people can also buy tickets.