Airlines Say U.S. Aid Critical to Survival During Pandemic
(Bloomberg) -- Airline executives and lawmakers gave a full-throated defense for the $54 billion in U.S. aid that helped shield the industry from the ravages of the coronavirus pandemic, but other carrier policies came under fire at a Senate hearing on Wednesday.
Senator Maria Cantwell, the Washington State 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 this year, combined with concerns over airline performance and policies involving Covid-19 prompted a sometimes fiery hearing.
Some senators attacked vaccine mandates, demanded airlines refund airfares even when not legally required to do so and criticized the widespread practice of charging passengers extra fees.
Several lawmakers challenged United Airlines Holdings Inc. Chief Executive Officer Scott Kirby over the company’s early adoption of a Covid-19 vaccine requirement.
Senator Ted Cruz, a Texas Republican who opposes vaccine mandates, praised the other executives for not being as restrictive with their employees, then singled out United. “Mr. Kirby, United’s behavior on this issue has been deeply disturbing,” Cruz said.
United has required employees who interact with the public or other workers to be vaccinated. About 200 have been forced to leave the company after refusing, or less than 1%, Kirby said.
“Senator Cruz, we did this for safety,” Kirby said. “We believe it saved lives.”
Senators Richard Blumenthal of Connecticut and Ed Markey of Massachusetts, both Democrats, peppered the executives with questions over their policies on refunds and bag fees. While the executives said they would work with the lawmakers on legislation on the issue, none made any promises to change their policies.
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 the coronavirus have led to thousands of in-flight episodes 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.
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 people 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 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.
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