Airline CEOs from American Airlines, United Airlines, Southwest Airlines, and Delta Air Lines were in the hot seat on Wednesday.
The Senate Committee on Commerce, Science, and Transportation asked airline executives regarding a myriad of issues. This includes staffing shortages, fuel availability, vaccine mandates, 5G, and how the bailout aid was used.
Airline CEOs Explained How The Industry Used the $54 billion Aid
Airline CEOs explained to lawmakers the reasons why the industry encountered mass flight cancelations and delays this year.
The industry received $54 billion in taxpayer aid during the peak of the pandemic. The goal was to use the funds to preserve jobs. But in return, airlines can’t involuntarily furlough employees, agreed to limit executive compensation, and remove stock buybacks and dividends.
Unfortunately, even with the billions in aid, airlines reduced their workforce. Thousands of employees accepted retirement offers and even took unpaid leave. And when travel demand returned, airlines had to deal with fewer employees.
For Southwest CEO Gary Kelly, “I can sum up the (Payroll Support Program) in two words: It worked”. Travel demand dropped by more than 95% during the start of the pandemic. And because of this, the US airline industry lost $35 billion last year. The Payroll Support Program allowed the airlines to help get back on their feet and even meet travel demand when it started to recover.
American’s CEO Doug Parker said that “It’s not an exaggeration to say the program saved the airline industry”. Alaska CEO Ben Minicucci wrote in a statement that by “keeping employees on staff, it reduced the time that would have been required to train people coming back to work—an effort that takes months and significant resources”.
Staffing Shortages
In July, committee chairwoman Senator Maria Cantwell, D-Wash, wrote to airlines asking about the role of staffing shortages in mass flight disruptions. She wrote that “This reported workforce shortage runs counter to the objective and spirit of the PSP”.
Currently, airlines are on a hiring spree. American plans to hire additional 18,000 employees by next year. Southwest, on the other hand, plans to hire additional 8,000 employees in 2022. Also, airlines are cutting their flight schedule and offering incentives for employees to work during the holiday season.
