Two House Democrats have requested an investigation into whether airlines utilised a portion of a government coronavirus assistance package to pay for staff buyouts during the pandemic by a Treasury Department inspector.
Accepting $54 billion in federal help to combat the COVID-19 outbreak came with a clause prohibiting airlines from laying off employees. Early on in the crisis, travel demand completely plummeted. Carriers, however, were successful in pressuring employees to take lengthy leaves of absence or early retirement benefits. Numerous pilots—thousands of them—took them up on the offer.
Reps. James Clyburn, D-S.C., the head of the Select Subcommittee on the Coronavirus Crisis, and Carolyn Maloney, D-N.Y., chairwoman of the House Committee on Oversight and Reform, asked the Treasury Department’s watchdog to investigate how airlines used the Covid-19 aid and whether it was used for buyouts or staff reductions in a letter seen by CNBC on Thursday.
The trade association for American, Delta, United, Southwest, and other significant U.S. carriers, Airlines for America, claimed that the cash from the Payroll Support Program “went only to the paychecks of employees, as mandated by law, and carriers have paid back the government loans.”
According to the organisation, “without the PSP, our aviation system would look like Europe, Canada, or other regions that did not have any equivalent programme.” “Or worst, we might not be flying at all if it weren’t for the PSP,” he continued.
The year’s remarkable comeback in travel demand left airlines understaffed, even in the cockpits. As a result, some airlines, notably American and United, cut back on travel, particularly to small cities, or grounded dozens of aircraft. Regional airlines often fly shorter routes, therefore to bolster their own pilot numbers, airlines have hired hundreds of new pilots from those smaller carriers.
This year’s labour shortages have made it more difficult for airlines to recover from common problems like severe weather.
Millions of American taxpayers’ travel plans have been disrupted as a result of thousands of flights being delayed or cancelled due to pilot shortages, the legislators claimed in a letter to Richard Delmar, deputy inspector general of the Treasury Department.
Delmar acknowledged receiving the letter and stated that his office intended to reply to the MPs within the next few days.
Treasury Department officials chose not to comment.
Maloney and Clyburn requested the preliminary findings from the watchdog by September 22.
According to the Department of Transportation, U.S. carriers had 456,398 full-time equivalent personnel at the start of 2020. By November of that year, that number had dropped to 363,354. Since more than a year ago, airlines have been actively hiring; as of June, they employed 455,642 full-time equivalents.