Airline CEOs explain flight cancellations to Congress after taking $54 billion in taxpayer aid

An American Airlines airplane lands at Ronald Reagan Washington National Airport November 23, 2021 in Arlington, Virginia.

Drew Angerer | Getty Images

Top airline executives on Wednesday informed a Senate panel {that a} tight labor market and problem convincing some employees to decide up shifts contributed to mass flight cancellations this 12 months, regardless of the $54 billion in taxpayer aid the carriers took to cowl their labor prices when journey demand collapsed in the pandemic.

The CEOs of American Airlines, United Airlines and Southwest Airlines, and Delta‘s chief of operations testified earlier than the Senate Committee on Commerce, Science, and Transportation that the aid helped them survive the disaster and that they are now ramping up hiring.

Senators in the course of the greater than three-hour listening to included questions on airways’ hiring bother, gas availability, myriad charges and vaccine mandates although it was referred to as to assess the business’s bailout, its largest.

“I can sum up the [Payroll Support Program] in two words: It worked,” stated Southwest CEO Gary Kelly stated.

U.S. airways misplaced a report $35 billion final 12 months however executives say the Payroll Support Program, which prohibited them from shedding employees, was a bridge to get them to the purpose when air journey demand began to get well in earnest. Travel at the beginning of the pandemic fell greater than 95%.

“It’s not an exaggeration to say the program saved the airline industry, which Congress and the administration recognized as critical infrastructure that is as essential to the economy as it is unique,” American’s CEO, Doug Parker, wrote in his testimony.

Alaska Airlines CEO Ben Minicucci stated in written remarks 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.”

While airways that accepted the aid could not lay employees off, they considerably lowered head depend by urging staff to take voluntary measures like buyouts, leaves of absence or briefly idled employees in alternate for lowered pay. The payroll aid was largely in the type of grants that do not have to be paid again in addition to some loans.

Staffing shortages

When demand returned quicker than anticipated, a scarcity of workers exacerbated routine issues, like dangerous climate, and contributed to hundreds of flight cancellations when journey demand took off this 12 months. Airlines say they’re including workers as shortly as doable to cater to the rise in air journey.

The CEOs of Southwest and American, which every had operational meltdowns this fall that derailed the journey plans of hundreds, stated it has been troublesome to get employees to decide up further shift, a development that makes it tougher for airways to get well from disruptions.

Sen. Maria Cantwell, D-Wash., the committee’s chairwoman, in July wrote to main airline executives, elevating considerations about staffing issues’ position in flight disruptions. “This reported workforce shortage runs counter to the objective and spirit of the PSP, which was to enable airlines to endure the pandemic and keep employees on payroll so that the industry was positioned to capture a rebound in demand,” she wrote.

In ready remarks forward of the listening to, Cantwell stated the committee will hear from business leaders on whether or not the aid labored. She stated the payroll aid saved airline employees on the job and helped airways improve service. “If you look at how the airline workforce was retained, how quickly flights were restored and the boost aviation gave to the US economy the answer is yes,” she stated.

At Dallas-based Southwest, 15,200 employees, or 25% of its workers, accepted a voluntary program, with 4,500 of them leaving the corporate completely. It now goals to rent 8,000 staff in 2022 on high of 5,000 new employees this 12 months.

American stated its hiring purpose is 18,000 subsequent 12 months after including 16,000 in 2021.

Some 17,000 Delta staff took buyout packages and 40,000 volunteered for momentary leaves of absence. So far this 12 months, it has added 8,700 staff, a few of them beginning at decrease pay charges in contrast with extra skilled staff who opted for buyouts.

“We’re getting a nice juniority benefit as we bring in a whole new generation of employees at essentially every level of the company,” CEO Ed Bastian stated Oct. 13 on a quarterly name. “We had close to 20,000 people retire a year ago, so the top end … many of our most experienced employees have chosen to retire, and that’s opened up opportunities for younger people.” Bastian stated the corporate hasn’t modified its pay scales.

United Airlines, together with Delta, has been extra conservative about bringing again flights than American and Southwest.

“After dramatically cutting our flight schedule at the start of the pandemic, we knew it would be challenging to bring flights all back at once, so we made the decision to gradually add flights over time,” United CEO Scott Kirby wrote in his testimony. “While this choice sacrificed short-term profits, it allowed us to ensure a reliable service and to largely avoid the widespread operational challenges experienced by other carriers.”

Sara Nelson, president of the Association of Flight Attendants, who labored intently with airline executives and lawmakers to get the payroll help permitted, can be scheduled to testify in entrance of the committee. She referred to as for elevated protections for cabin crews which have confronted a surge in unruly and at times violent passengers.

“The last thing we need, especially before the December holidays after dealing with all of the stresses on the frontlines of this pandemic for two years, is a false narrative about the [payroll support] program,” learn her written testimony. “Unfounded controversy breeds contempt for aviation workers simply doing our jobs to keep everyone safe.”

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