(Bloomberg) — Airline executives and lawmakers gave a full-throated defense at a Senate hearing for the value of the $54 billion in U.S. aid that went to the industry that was ravaged by the coronavirus pandemic.
Senator Maria Cantwell, the Washington Democrat who is chairwoman of the Commerce, Science and Transportation Committee, began the hearing Wednesday by asking whether the relief program had worked.
“The answer to that question is yes,” Cantwell said. “I know we’re in a better place” than if Congress hadn’t approved the aid, she continued.
American Airlines Group Inc.’s Chief Executive Officer Doug Parker summed up the industry’s reaction, saying, “We, at American Airlines, are deeply grateful for the pandemic assistance we received.”
However, the sometimes rocky recovery of demand toward normalcy this year in the industry, combined with consumer group concerns over airline performance and fees, have led to some congressional criticism.
The industry has faced repeated challenges since mid-March 2020, when passenger volumes plummeted to as low as 4% of the previous year. Not only did the airlines face billions of dollars in lost revenue and difficulties rebuilding staff, but the tense politics surrounding Covid-19 have led to thousands of in-flight incidents involving unruly passengers.
Congress has provided grants totaling $35.6 billion for payrolls at the 11 largest U.S. passenger carriers in a series of bills since early 2020.
Flight Disruptions
Several airlines, including American and Southwest Airlines Co., have been forced to cancel thousands of flights as they struggled with high volumes of traffic in recent months.
The flight disruptions occurred for a variety of reasons, such as a more rapid increase in passenger demand than expected, the reluctance of some furloughed employees to return to work and the time lag required to recertify safety-critical employees such as pilots, the Airlines for America trade group said in a letter to House lawmakers Dec. 7.
As a result, the industry is moving to hire more staff. American said it’s hired more than 16,000 workers this year and has targeted adding 18,000 more in 2022. Delta Air Lines Inc. has added 8,700 in 2021 with plans for an undisclosed additional number next year.
Southwest plans to add 25,000 over three years, including 5,000 this year. United Continental Holdings Inc. added 1,000 pilots this year.
The A4A trade group estimates that approximately 50,000 airline employees opted for early retirement or voluntary separation, while approximately 100,000 took unpaid leaves of absence.
Government payroll aid didn’t cover full employee costs for any of the airlines, spurring carriers to offer widespread buyout, early retirement and leave programs to further reduce spending as travel demand languished. At least 150,000 workers voluntarily left the nation’s four biggest carriers or took leaves of various lengths.
When demand began to recover and workers were recalled from leaves of absence during the pandemic to help the carriers reduce costs, the airlines discovered that some had taken other jobs or no longer wanted to return. Some airlines have had trouble hiring as quickly as they are used to, competing against companies like Amazon.com Inc. or Walmart Inc. to attract entry-level workers. Contractors used for airport services in smaller cities also have had trouble hiring. And training for jobs such as pilots and flight attendants has also slowed getting more workers back on the job.
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