Finance

As United weighs outsourcing catering, U.S. lawmakers demand new curbs on federal aid By Reuters

© Reuters. FILE PHOTO: A United Airlines passenger jet lands at Newark Liberty International Airport, New Jersey, U.S. December 6, 2019. REUTERS/Chris Helgren

By Tracy Rucinski and David Shepardson

CHICAGO/WASHINGTON (Reuters) – A group of U.S. lawmakers is demanding that airlines refrain from outsourcing jobs if they want to be eligible for a third round of federal payroll aid, after learning that United Airlines has sought bids to outsource catering work at five airports.

Around two dozen members of U.S. Congress made the request to Treasury Secretary Janet Yellen, according to letters released by Unite Here, the union representing more than 2,500 workers whose jobs are at risk under United’s proposal.

Chicago-based United has received $7.7 billion in two COVID-19 relief deals, known as payroll support programs (PSP), to help the airline industry weather the pandemic and protect jobs. United stands to receive another $2.8 billion under a third package set to run through Sept. 30.

“We respectfully request that any new PSP payments to United Airlines and other carriers make clear that any outsourcing of jobs while receiving PSP payments would violate the terms of the program,” seven senators wrote in a May 4 letter to Yellen, who has authority over the terms of the aid.

Treasury did not immediately comment on the letter.

United spokeswoman Leigh Schramm said the company has not yet made any decisions to move forward with a third-party vendor for its inflight catering services after seeking proposals in January.

“Given the unprecedented impact of COVID-19 on our business, United continues to explore ways to do things differently and become more efficient wherever we can,” she said, adding that the outsourcing proposal is “part of that effort.”

Union members and the lawmakers who signed the letters say United’s proposal — which would impact workers in Newark, New Jersey; Cleveland, Ohio; Denver, Colorado; Houston, Texas; and Honolulu, Hawaii — violates the spirit of the aid.

A Treasury official said more information on the third tranche of airline support would be posted next week.

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