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Lawmakers Want Airline CEOs to Explain What Happened to Stimulus Aid

Date: December 8, 2021

By Kyle Arnold, Dallas Morning News

Lawmakers are calling on the leaders of American Airlines, Southwest Airlines and others to explain why they are experiencing labor shortages after getting more than $54 billion in federal stimulus during the COVID-19 pandemic to prevent job losses.

American Airlines CEO Doug Parker, Southwest Airlines CEO Gary Kelly and United Airlines CEO Scott Kirby are slated to testify Dec. 15 at a U.S. Senate Commerce Committee hearing in Washington, D.C.

The hearing comes after American and Southwest encountered major disruptions in October that started with isolated severe weather and cascaded into widespread cancellations and delays that left hundreds of thousands of customers delayed and stretched on for four or five days.

Parker, Kelly and others lobbied hard in Washington in 2020 and early this year to secure billions in aid to airlines under the premise that air travel workers would be needed to respond when demand did return.

Parker and Kelly have both announced that they are retiring as CEOs from their airlines early next year.

Despite all that cash, U.S. airlines are employed 28,000 fewer workers in October than during the same month in 2019 before the COVID-19 pandemic forced cost-cutting.

Fort Worth-based American Airlines has 10,000 fewer workers than it did two years ago, and Dallas-based Southwest has reduced its workforce by 5,000, according to the Bureau of Transportation Statistics.

But American, Southwest, Spirit Airlines and others have encountered difficulties hiring workers amid a tough labor market, with 11 million job openings across the country, according to the U.S. Labor Department.

Southwest Airlines is in the middle of an effort to hire 5,000 workers by the end of the year and says it will need 8,000 next year as well.

“The hiring environment is the most difficult we have ever seen, and once again, I think we’re loath to predict or forecast when that is all going to smooth its way out,” Kelly said at a Southwest Airlines investor conference Wednesday. “But we can’t fulfill our aggressive plans without getting the incremental hires that we need.”

While airlines kept workers on the books through the $50 billion in aid, including $7.3 billion for Southwest, they also encouraged thousands of workers to take early retirement and voluntary separation packages to trim expenses.

Now that the airlines are recovering and flight levels are back, lawmakers are concerned that all that money didn’t do what it was expected to do.

“We suspect that the voluntary separations coupled with a faster than anticipated growth in travel volumes may have rendered airlines less resilient when recovering from cascading disruptions and delays due to weather and other variables, like those we saw earlier this fall,” Rep. Peter DeFazio, D-Ore., and Rep. Sam Graves, R-Mo., said in a letter to an airline lobbying group earlier this month. “As you know, travelers don’t care why their flight is delayed. They care just that it’s delayed.”

Airlines 4 America, the trade group for major airlines, said the Payroll Support Program did save thousands of jobs, prevented airlines from canceling airplane orders and ensured air service to small communities. But a two-month lapse in funding last fall forced airlines to take cost-cutting measures.

“If all of those employees had been furloughed, airlines would not have been able to meet the unprecedented demand surge that occurred this summer and has continued into this fall,” Airlines 4 America CEO Nick Calio said in a letter responding to lawmakers.

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