CEOs of American, Southwest, and United Airlines attended a US Senate Commerce Committee hearing on Wednesday in Washington, DC, to defend their use of federal funding.
Lawmakers wanted to know why, after airlines received $54 billion in federal stimulus money during the COVID-19 pandemic to prevent job losses, airlines are still experiencing labor shortages.
The hearing comes after American and Southwest Airlines had systemwide operational disruptions in October. The issues began with isolated severe weather and concluded with days of sweeping cancellations that left hundreds of thousands of would-be passengers delayed and stranded.
American Airlines CEO Doug Parker, who is retiring as CEO next year, and Southwest Airlines CEO Gary Kelly lobbied in Washington in 2020 and early 2021 to get federal aid for their airlines, reasoning that more airline workers would be necessary to meet demand once the COVID pandemic ended.
Despite securing a hefty sum of federal aid through the Payroll Support Program, US airlines had 28,000 fewer workers in October of 2021 than in the same month in 2019 before the pandemic hit.
American Airlines in Fort Worth currently employs 10,000 fewer workers than it did two years ago, and Southwest in Dallas has reportedly reduced its workforce by 5,000.
The problem appears to have been in putting that federal funding to use. American, Southwest, and Spirit Airlines are having trouble finding workers.
“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.
While the federal aid assisted them in keeping workers on, the airlines also encouraged thousands of employees to accept early retirement or voluntary separation packages to cut costs.
With the losses of those workers come understaffing issues like airlines saw this past fall. As airlines recover and more flights are booked – this past Sunday saw a pandemic high of 2.4 million US airport passengers – proper staffing becomes an even greater necessity.
Now lawmakers are concerned that the federal stimulus did not serve its purpose in ensuring that there would be enough air travel employees once demand returned.
“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,” US Representatives Peter DeFazio and Sam Graves wrote in a letter to Airlines for America, a trade group for major airlines.
In his letter of response, Airlines for America CEO Nicholas Calio alleged that the Payroll Support Program saved approximately 735,800 US full-time equivalent jobs.
“Congress’s investment of $54 billion to pay tens of thousands of airline employees for weeks and months on end during the pandemic not only helped workers and their families but also ensured continued air service in communities of all sizes across the country and benefited the broader economy,” Calio wrote. “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.”
